1999 (4) TMI 184 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the admissibility of credit under Rule 57C when final products are cleared without payment of duty for deemed export under Rule 191B, and the interpretation of exemption under Rule 57C in relation to duty payment on inputs.

Admissibility of Credit under Rule 57C:
The Collector (Appeals) held that credit is not admissible on inputs if duty is not paid on the final product, rejecting the appellant's contention that the exemption referred in Rule 57C should be granted by a notification issued under Section 5A of the Act. The Collector relied on a previous appellate order in the appellant's own case to support the decision that credit was not admissible on inputs used in the final product cleared without payment of duty under Rule 191B.

Facts of the Case and Appellant's Arguments:
The appellants, manufacturers of polyester staple fibers, cleared goods without payment of duty for export, leading to a demand for recovery of wrongly taken credit under Rule 57-I. The appellants argued that the removal of goods without payment of duty is not exempted, and the utilization of credit is in order. They contended that the notification under Rule 191B allows goods to be removed without payment of duty for export under bond, indicating that the goods are not exempted from duty.

Tribunal's Decision and Precedents:
The Tribunal, following previous decisions, held that the bar of Rule 57C is not applicable when final products are exported under bond under Rule 191B. The Tribunal set aside the impugned order and allowed the appeal, providing relief to the appellants. The Tribunal noted that its decision in this case aligns with previous rulings in similar matters involving the interpretation of Rules 57C and 57G.

Conclusion:
After considering the submissions and case law, the Tribunal found that the case is fully covered by previous decisions, leading to the decision that the bar of Rule 57C does not apply when final products are exported under bond. Consequently, the impugned order was set aside, and the appeal was allowed, with the possibility of consequential relief in accordance with the law.