TMI Blog2010 (6) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... S/Shri P.G. Chacko, S.K. Gaule, JJ REPRESENTED BY : Shri Vinay S. Sejpal, Advocate, for the Appellant. Shri N.A. Sayyad, DR, for the Respondent. [Order per : P.G. Chacko, Member (J)] . - M/s. Niphad S.S.K. Ltd., (hereinafter referred to as the assessee) were engaged in the manufacture of sugar, molasses, rectified spirit, denatured spirit and Extra Neutral Alcohol (ENA) during the material period. They had two divisions, namely Sugar Division and Distillery Division. In the Sugar Division, sugar was manufactured and cleared on payment of duty. Molasses, a by-product, was removed from the Sugar Division, on payment of duty, to the Distillery Division where it was used in the manufacture of rectified spirit (exempted final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner was taken in appeal to the Commissioner (Appeals) and the latter sustained the order of adjudication. The present Appeal No. E/1499/03 is against the appellate Commissioner s order. The order of the Commissioner (adjudicating authority) dropping the demand of Rs. 17 lakhs was taken in appeal to this Tribunal, which is E/492/05. In this appeal of the Revenue, the assessee has filed a counter styled as Cross Objection . 2. After examining the records and hearing both sides, we note that the Revenue s case is principally founded on Circular No. 615/6/2002-C.X., dated 4-2-2002, wherein it was clarified, in respect of a manufacturer running both Sugar Unit and Distillery Unit, as follows :- Where sugar unit and distillery un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the notifications issued thereunder, the credit of specified duty allowed in respect of any inputs may be utilized towards payment of duty of excise on any other final product, whether or not such inputs have actually been used in the manufacture of such other final product, if the said inputs have been received and used in the factory of production on or after the first day of March, 1997. The learned Counsel has argued that the above provision of law clearly permitted the assessee to utilize the credit on molasses (input for Distillery Division) towards payment of duty on sugar (final product of the Sugar Division) on or after 1-3-1997. The credit availed in December 1998 is, therefore, admissible to the assessee. In relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled, at the material time, to utilize the credit on molasses for payment of duty on sugar. They have relied on the proviso to Rule 57F(12) in respect of the transaction made in December 1998 and on sub-rule (1B) of Rule 57AB in respect of the transaction made in October, 2001. The proviso ibid opens with a non obstante clause (notwithstanding anything contained in Rule 57A and the Notifications issued thereunder), which would imply that the rule-making authority intended to relax certain conditions for utilisation of credit taken on input. Accordingly, a manufacturer of final product was allowed to utilize the credit of duty paid on any input towards payment of duty on a final product even if such input was not actually used in the man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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