TMI Blog2001 (2) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... en the inputs were brought into the factory, and the same were correctly utilised in terms of Rule 57F and that the provisions of Rule 57C in the facts of this case would not apply." The facts of the case are as follows : 2.The respondent, M/s. Premier Tyres Ltd. is the manufacturer of tyres. They filed a declaration under Rule 57G of the Central Excise Rules and took Modvat credit in respect of the inputs specified under Rule 57A. After the finished goods were manufactured, the respondent cleared part of the goods free of duty under a notification. The Department took the view that since the part of the goods was cleared without duty, the credit entry with regard to that be reversed. This is clear from Annexure A issued by the Superint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the credit is specified under Rule 57F and under Rule 57F(3) the same can be used for payment of duty on any of the final product in or in relation to the manufacture of which such inputs are intended to be used. 3.We heard learned Counsel for the Department Shri K. Ramakumar and learned counsel for the Company Sri Joseph Kodianthara. 4.Sri K. Ramakumar, learned Counsel for the Department, submitted that the credit regarding inputs is given only when ultimately the products are chargeable to duty. If ultimately, the products are not chargeable to duty, the credit is to be reversed. But on the other hand, Shri Joseph Kodianthara, learned Counsel appearing for the respondent submitted that it is not a case where the products were compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt from duty or is chargeable to nil rate of duty. Utilisation of the credit comes after allowing a credit of duty paid on the inputs. If any credit is wrongly taken and then utilised there are provisions in the Modvat scheme under Rule 57-I by which limitation of period has been provided for recovery of the wrong credit initially taken or utilised. According to us, utilisation of the credit is different from taking the Modvat credit if at the time of taking the Modvat credit, products are not exempted. Thus, according to us, it is not necessary to reverse the entry immediately. It is enough if it is utilised later. Further in this case, we were told that exemption notification was subsequently issued. The exemption notification was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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