TMI Blog2003 (6) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... Z.U. Alvi, learned Advocate, submitted that the Appellant manufacture various excisable goods and avail the facility of Modvat credit of the duty paid on the inputs; that they procure all their major inputs in bulk in advance and at the time of receipt of the inputs, it is not known as to which final product the inputs would be used; that they availed Modvat credit on inputs and utilize the same immediately thereafter as none of their final products were exempted from whole of duty; that part of the inputs have been used in the manufacture of certain goods which, though as such were not exempted, were cleared without payment of duty to specific users whom certain clearances were exempted to from duty subject to fulfilment of conditions spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re dutiable which subsequently came to be exempt from duty, credit availed and utilized is not required to be reversed; that the present matter is factually identical to Ashok Iron and Steel case; that the Larger Bench under the said decision has followed the judgment of Kerala High Court in the case of Commissioner of Central Excise v. Premier Tyres Ltd., 2001 (130) E.L.T. 417 (Ker.). He therefore, contended that as the Modvat credit has been taken by them validly at the time of receipt of inputs, it cannot be subsequently disallowed if the same is used in the manufacture of goods which are exempted subject to compliance of a specific conditions. He also contended that realization of 8% amount of sale value of clearance is by no means duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty under Section 11AC has been imposed. 3. Countering the arguments, Ms. Charul Baranwal, learned Senior Departmental Representative, submitted that in respect of period prior to the introduction of Rule 57CC, provisions of Rule 57C would be applicable which provided that no Modvat credit will be available if the inputs are used in the manufacture of exempted products; that the goods which have been cleared by them are clearly exempted from payment of duty; that the Notifications have been issued under the provisions of Section 5A of the Central Excise Act and the goods being exempted from payment of whole of duty, provisions of Rules 57C and 57CC are attracted; that the decision in the case of Premier Tyres and Ashok Iron and Steel are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exempt generally or absolutely or subject to such conditions as may be specified in Notification excisable goods from the whole of the duty of excise leviable thereon. In the present matters also, different notifications exempts excisable goods on fulfilment of specific conditions. For instance Notification No. 64/95 exempts excisable goods if supplied as stores for consumption on Board a vessel of the Indian Navy or Coast Guard. Similarly same notification exempts systems and sub-systems of launch vehicle and systems and sub-systems of Satellite Projects meant for use in a launch vehicle project or a satellite project of the Indian Space Research Organisation or the Department of Space. Similarly, Notification No. 10/97 exempts scientifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of exempted final products and as such they were required to pay an amount equal to 8% of the price of the exempted product at the time of their clearance. The decisions in the case of Premier Tyres and Ashok Iron and Steel cases are not applicable as the facts are different. In Premier Tyre case the Modvat credit had been taken for eligible final products which were dutiable on the date of receipt of inputs and came to be exempted later on. Similarly, in the case of Ashok Iron and Steel, the product was dutiable at the time of receipt of the inputs and subsequently it becomes exempted from payment of duty. In the present matter before us, it is not the case of the Appellants that when they brought the inputs the products manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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