1995 (11) TMI 178 - AT - Central Excise

Summary

Issues involved: Interpretation of exemption notification for availing MODVAT credit and the right of a manufacturer to choose whether to avail the benefit of exemption notification or take credit on inputs.

Interpretation of Exemption Notification and MODVAT Credit:
The appellants, manufacturers of plastic cups, containers, faced proceedings regarding availing the benefit of exemption Notification 53/88 and taking credit of duty on inputs for MODVAT Credit. The learned Consultant for the appellants cited a similar case before the East Regional Bench where it was held that a manufacturer has the right to choose whether to avail the exemption notification or take credit on inputs. The Tribunal found that the plea was covered by the ruling of the East Regional Bench, emphasizing the statutory force of MODVAT Rules and the right of an assessee to claim both exemption notification and MODVAT Credit. The Tribunal held that it is the option of an assessee to claim or not claim the benefit of an exemption notification, and the benefit of MODVAT Credit cannot be denied even if the final product is exempt from duty. The Tribunal also clarified the interpretation of Rule 57C regarding the allowance of MODVAT Credit when the final product is fully exempted, ultimately allowing the appeals based on the above ruling.

Conclusion:
In conclusion, the Appellate Tribunal CEGAT, Madras allowed the appeals based on the interpretation of exemption notification and MODVAT Credit, emphasizing the right of a manufacturer to choose whether to avail the benefit of exemption notification or take credit on inputs, as established in a similar case before the East Regional Bench.