9911796707
TMI Blog1996 (2) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of chlorine. 3. The learned lower appellate authority has upheld the demand of duty in respect of spent sulphuric acid which was cleared from the appellants unit under Rule 57F read with Rule 57D. Similar issues had come up before this Tribunal and the same issue was a subject matter of writ petition before the Allahabad High Court also and it has been held that the Modvat credit taken in respect of the concentrated sulphuric acid which may be contained in the spent sulphuric acid is not required to be expunged, but the duty will have to be charged on the spent sulphuric acid which is cleared from the appellants factory. Inasmuch as the issue stands covered with the consent of parties, the appeals themselves are taken up for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992 (61) E.L.T. 310 and the Hon'ble Allahabad High Court in the case of M/s. Varuna Sulphonators Pvt.Ltd. v. UOI reported in 1993 (63) E.L.T. 42 (All.). 7. This Tribunal in the context of the use of sulphuric acid has held as under :- 4. We observe that the short point that falls for our consideration is whether the appellants have correctly taken the Modvat credit and utilised the same for the purpose as envisaged in the Modvat Scheme under the Central Excise Rules. We observe that under Rule 57A for the purpose of eligibility of the Modvat credit the inputs and the finished product should be specified in the notification issued under the said Rule. It is the admitted position that both the inputs and the finished product are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants plead that in terms of the notification and in conformity with the Rules they correctly took the Modvat credit. The charge against the appellants is that they did not declare to the Department that only 49% of the inputs viz. Oleum for which they availed of the Modvat credit had been consumed in the process of manufacture of the finished product. We observe that there is nothing in the Rules to suggest that Modvat credit could be taken only for that portion of the inputs which got consumed in the manufacturing process. The learned lower authority has not cited any rule from which this assertion could be read. The learned lower authority has also held that the appellants had not declared to the Department the percentage of the Oleum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the input credit was taken for the purpose of their taking out from the factory for home consumption. The Rules do not envisage the reversal of the Modvat credit even in such a contingency. The appellants' case is on a superior footing inasmuch as the input as has been taken into the manufacturing stream. For the purpose of Modvat Rules, it makes no difference if the whole of the material put in the manufacturing stream has not got consumed and that in the nature of the manufacturing process part of it has emerged as a product which is described as spent acid. It is not the case of the Department that spent acid is Oleum which was the input taken. It may be something which may be akin to Oleum. Even if it had emerged only as Oleum, in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the purpose of paying duty on the declared specified finished product. The authorities have allowed the clearance of spent acid free of duty without applying their mind as to whether under the Scheme of Modvat under the Rules this could be allowed. The issue posed before us is not in the context of the free clearance of the spent acid but in the context of only that portion of the input not consumed in the manufacturing process. As mentioned earlier, in case the portion of the input which came out unutilised in the same form, the Rules clearly provide for payment of duty on the same under Rule 57F in case the same was being cleared from the factory or for being treated as waste under Rule 57F(4). For the purpose of the appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lphuric acid used in the manufacture of detergents. In this circular, the Board does not say that credit will be allowed only on that input which is actually consumed. The effect of the circular dated 18-5-1992 is that it rescinded all existing instructions and permitted credit on the entire input which is put to use in the manufacture. This circular fully supports the contention of the petitioner. 12. In the light of the aforesaid observations, Modvat credit already allowed on the duty paid input during the period from May, 1991 to October, 1991, cannot be recovered under Rule 57-I of the Rules, inasmuch as there was no error in allowing the same. 9. Following the ratio of the Hon'ble High Court's judgment above and our earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
