TMI Blog2006 (10) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules, 1944, besides directing payment of interest under Section 11AB of the Act. The appellant has filed written submissions through the authorized representative for disposal of the matter. 2. The appellant was engaged in the manufacture of paints, enamel and varnish falling under chapter heading Nos. 27, 32 and 38 respectively of the Tariff Schedule. The appellant was availing Modvat credit facility in terms of declaration filed under Rule 57G of the Rules on 29th March 2000. The appellant submitted a letter bearing C. No. Ex-PP/99-2000/3205 dated 29th March 2000 to the Superintendent, Central Excise submitting that they shall be receiving In process Paint (rejected paint) under Rule 57-A for further manufacture of their fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that Modvat credit was wrongly taken on these goods, and confirmed the demand. The Appellate Commissioner also came to the same finding that the goods received by the appellant were nothing but marketable product as per the declaration made under Rule 173B. It was held that the appellant was not entitled to take credit on these goods which were final product as declared by the appellants themselves. 3. In their written submissions, the appellant have stated that they had received sub-standard paint from M/s Asian Paints (India) Limited under excise invoice dated 25th March 2000 and this defective material was to be used for manufacture of other paint namely AMPRO - Asian Metal Primer Red Oxide. According to the appellant, it had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e type of goods received under the invoice dated 25th March 2000 by the appellant namely APCO, synthetic enamel golden brown colour were manufactured by the appellant as per the declaration under Rule 173B of the Rules. He submitted that in the invoice it was nowhere indicated that the goods sold thereunder were rejected goods or were defective in any manner, nor was it indicated by the appellant from any material that the price charged under the invoice was for defective and rejected material. He submitted that these goods being of higher value could not have been utilized for manufacturing inferior paint, namely, AMPRO - Asian Metal Primer Red Oxide. According to him, fully finished and branded product sold under the invoice dated 25th Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shows that excise duty of Rs. 1,32,202.60 was paid in respect of the goods at the time of their removal from the premises of M/s. Asian Paints (India) Limited. It is in respect of this amount that the appellant had availed Modvat credit which according to the Revenue was wrongly availed and liable to be recovered. 6. Under Rule 173H(1), duty paid excise goods cannot be brought into, or retained in a factory except as specifically provided in sub-sections (2) and (3) thereof. Under clause (a) of sub-rule (2) of Rule 173H, it was, inter alia, provided that excisable goods recommended by duty paying documents can be brought into or retained in the factory, if such goods are required for use in the manufacture of other goods namely, goods o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub standard SP. Syn. Enamel Stov Stov DIP Enamel . In the column about the nature of these inputs, it was stated that they were Raw material . Credit of the duty could be taken under Rule 57G only on the inputs described and not on any other goods. The invoice under which the goods namely, Apco synthetic enamel golden brown were supplied to the appellant does not indicate that these were sub-standard SP. Syn. Enamel Stov Stov DIP Enamel , which were the inputs described in the Modvat declaration made by the appellant under Rule 57G. Since these were neither in process paint nor rejected paint which were to be used as input as per the intimation letter dated 29th March 2000 which is referred to in the impugned order, the authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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