9911796707
TMI Blog1996 (5) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the original authority is as under : M/s. Kissan Products Ltd. Old Madras Road, Bangalore, (hereinafter referred to as the "assessee") are manufacturers of Fruit Slice, preparations of fruit and miscellaneous edible preparations, falling under Heading 08.01, 20.01 and 21.03 respectively. The assessee were availing credit of duty on inputs used in the manufacture of final products under Rule 57A of Central Excise Rules, 1944 (hereinafter referred to as the "Rules" for short) after filing the necessary declarations as required under Rule 57G of the Rules. By the issue of Govt. of India Notification Nos. 27/91-C.E., dated 25-7-1991 and 19/91 C.E., dated 25-7-1991, all the above mentioned goods were exempted from payment of centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the Modvat credit was taken, if the assessees were legally eligible for Modvat credit and they had subsequently utilised the same correctly under Rule 57F, the course open to the authorities, in case the finished product was exempted later or denotified for the purpose of Modvat credit benefit was, to recover the duty due on the goods namely inputs lying in stock under the provisions of Rule 57F. (1) CCE Guntur v. Pinakini Beverages - Order No. 320/1995, dated 13-5-1995. (2) CCE v. Cennai Bottling Co. - reported in 1995 (25) ETR 540. (3) CCE v. Becon Weir Ltd. - reported in 1994 (72) E.L.T. 657. (4) M/s Sarvaraya Sugars - reported in 1992 (59) E.L.T. 125. In the case of Becon Weir reported in 1994 (72) E.L.T. 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re lying in stock. These by fiction created under the rule have to be treated as the manufacture of the respondent's factory and therefore when these are cleared for home consumption, from the factory, the same have to be charged to duty as if the same are the manufacture of the said respondents' manufacturing unit. Under Rule 49 consumption of the goods in the factory has to be deemed to be as if these goods have been issued out or removed from the factory place or premises for home consumption. In our view, provisions of Rule 57F(2) of the Central Excise Rules, 1944 will continue to operate in respect of the inputs on which Modvat credit has been taken. The only course open to the revenue is to demand duty in respect of the goods when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty of excise leviable thereon or chargeable to nil rate of duty in terms of Rule 57D. In the present case, when the goods were received finished product was chargeable to duty and, therefore, the question of disallowance of Modvat credit when it was taken could not have arisen. Under Rule 57F, the manner and utilisation of input credit allowable has been provided for. This rule specifies as under : "57F. Manner of utilisation of the inputs and the credit allowed in respect of duty paid thereon. - (1) The inputs in respect of which a credit of duty has been allowed under rule 57A may - (i) be used in, or in relation to, the manufacture of final products for which such inputs have been brought into the factory; or (ii) be remove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of the final product or remove the same without payment of duty under bond for export, provided that the waste, if any, arising in the course of manufacture of such intermediate products is also returned to the said factory :
4[Provided that the said waste need not be returned to the said factory if the appropriate duty of excise leviable thereon has been paid.
(3) Credit of specified duty allowed in respect of any inputs may be utilised towards payment of duty of excise."
In view of the above, following the ratio of the above decisions, and what we have held above, we set aside the impugned order and allow the appeal. However, we are not expressing any opinion on the other legal pleas raised by the appellants. X X X X Extracts X X X X X X X X Extracts X X X X
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