TMI Blog2005 (3) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... i, for the Respondent. [Order per : Markandey katju, C.J.].- This is a reference application under Section 35H(1) of the Central Excise Act, 1944 by which the following substantial question of law is sought to be referred for our opinion:- "Whether Modvat credit could be allowed at a later date without following any procedures as prescribed under Chapter V(AA) of the erstwhile Central Excise Rules, 1944?" 2. Heard the learned counsel for the parties. 3. The assessee M/s. Chemplast and Plastics India Limited, Mettur Dam is the manufacturer of various inorganic and organic chemicals falling under Chapters 28 and 29 respectively of the Schedule to the Central Excise Tariff Act, 1985. The assessee is manufacturing chlorine fallin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had wrongly availed exemption on chlorine which was used for captive consumption. Hence, the show cause notice was issued to the assessee to show cause as to why the duty on chlorine used by it for captive consumption should not be demanded, and by order dated 23-9-94 the Assistant Collector of Central Excise, Salem Division confirmed the above demand on the reasoning that chlorine and hydrochloric acid are different excisable commodities and either one of them has to suffer duty, and both cannot be cleared free of duty. Against the said order, the assessee filed an appeal before the Commissioner of Customs and Central Excise (Appeals), who confirmed the order of Assistant Collector of Central Excise. But on further appeal, the CEGAT, Chen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Projects Ltd. v. C.C.E. , 1989 (43) E.L.T. 595, the CEGAT held that a manufacturer who had not filed a declaration under Rule 57G would not be entitled to take credit of duty paid on inputs received. The filing of declaration is a substantive requirement and not merely a procedural requirement vide M/s. P.G. Conductors v. C.C.E., 1996 (81) E.L.T. 336. 7. On the other hand, it is submitted by the learned counsel for the assessee has not contested the eligibility to Modvat credit on merits, but has only disputed the procedural aspect. The only controversy in the present case is whether Modvat credit can be allowed at a subsequent date when it is found that the duty is payable on an intermediate product, without the procedure having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction of the Department. 9. Rule 56A relating to set off of duty is a pre-cursor to the Modvat Scheme, both of which are schemes intended to obviate cascading effect of duty paid at various intermediate stages. The ratio of the decision of aforesaid judgment of the Supreme Court applies to the facts of the present case also. In the present case also the eligibility to pay duty on chlorine, an intermediate product, arose only when the matter came up before the Tribunal, and till this time, the assessee had been claiming exemption from payment of duty on chlorine. 10. We agree with the learned counsel for the assessee that it is not open to the Department to deny Modvat credit to the assessee on the technical ground that the proced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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