TMI Blog2008 (7) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... ng machines) or cleared as such from their factory. Where inputs, on which MODVAT credit had been taken, were cleared as such for home consumption, duty was paid thereon as in the case of the final product. Where inputs were cleared for export under bond, then also duty was paid in terms of Rule 57F(3) of the Central Excise Rules, 1944. During the said period, inputs as such and final product were also cleared to 100% Export-Oriented Units (EOUs) without payment of duty against CT-3 certificates in terms of Notification No. l/95-CE, dated 4-1-1995. MODVAT credit had been availed on the inputs so cleared also. The Department took the view that the removal of inputs (on which MODVAT credit had been taken) to a 100% EOU within India was to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 61 (Tri.-Chennai)], this Bench held, on a similar set of facts, that the benefit of duty free procurement of inputs under Notification No. 1/95-C.E., dated 4-1-1995 was not available to a 100% EOU where such inputs were procured not directly from the factory of manufacture but from a party who had obtained the goods from the manufacturer and subsequently supplied the same to the EOU after availment of MODVAT credit. This Bench had also noted that the Tribunal had taken the same view earlier in the case of Siddhartha Tubes Ltd. v. Commissioner of Central Excise, Indore [2002 (148) E.L.T. 796 (Tri.-Del.)]. This Bench held as under :- The assessee is getting the inputs for manufacture of machineries, their final product, and avail o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise, Pune-II [2006 (196) E.L.T. 325 (Tri.-Mumbai)], wherein it was held that MODVAT credit was not liable to be denied to a DTA unit in respect of inputs procured by it and (after availing credit) removed as such to a 100% EOU without payment of duty against CT-3 certificate issued by the Range Officer exercising control over both the units. The learned Counsel has also cited similar orders passed by learned Single Members of the Tribunal viz. Lakshmi Synthetic Machinery Manufacturers Ltd. v. Commissioner of Central Excise, Coimbatore [2005 (184) E.L.T. 109 (Tri. -Chennai)], Manaksia Ltd. v. Commissioner of Central Excise, Kolkata-IV [2007 (216) E.L.T. 231 (Tri)=2007 (81) R.L.T. 620 (CESTAT-Kol.)] and Commissioner of Central Excise, Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. Referring to the Board's circular, the learned SDR has submitted that the issue examined therein was different. 4. After considering the submissions, we note that, in the Board's circular dated 31-12-1996, inputs removed as such for export under bond was treated on part with final product and, on this basis, it was clarified that MODVAT credit on such inputs could be utilised in the same manner as provided under the proviso to Rule 57F(4) in respect of final products. Accordingly, such inputs could be allowed for export under bond without reversal of MODVAT credit. This clarification was issued after examining the provisions of Rule 57F as the rule stood after 29-6-1995. Prior to the said date, there was a deemed manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Works (supra), the West Zonal Bench held against the Revenue vide Gharda Chemicals (supra). In the circumstances, we are of the view that a Larger Bench of the Tribunal should address the issue. Accordingly, the Registry is directed to place the records before the Hon ble President for constitution of a Larger Bench for considering and deciding on the following issue :- Whether, during the period March, 1996 to May, 1998, a manufacturer of final product, who procured inputs and availed MODVAT credit thereon, was entitled to remove the inputs as such, without reversal of the credit or payment of equivalent amount of duty, to a 100% EOU under CT-3 certificate in terms of Notification No. l/95-CE, dated 4-1-1995. (Operative part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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