Irregular availment of Modvat Credit under Rule 57B - CERA objections - Instructions regarding - Central Excise - 53/89-CX.8

Irregular availment of Modvat Credit under Rule 57B - CERA objections - Instructions regarding Circular No. 53/89-CX.8 Dated 16-11-1989 [From F. No. 267/133/89-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Irregular availment of Modvat Credit under Rule 57B - CERA objections - Instructions regarding. A question has been raised as to whether of SSI manufacturer can avail concessional rate of duty as per Para a(i) of notification No. 175/86, dated 1-3-1986, even if no Modvat credit is admissible on inputs used in final product (inputs being fully exempted or non excisable) AG's audit are of the view that concessional rate of duty in such cases would not be admissible. The matter has been examined by the Board, Para a(i) of Notification No. 175/86, dated 1-3-1986 lays down in clear terms that concessional rate of duty is available only on those goods on which manfacturers take credit of duty paid on inputs under Rule 57A and use the same for payment of duty on final products. Concessional rate of duty under this para is not applicable if credit under Rule 57A is not taken/admissible on inputs used in manufacture of final products. It has therefore been decided to admit the audit objection. The field formations may be suitably informed for finalising all pending assessments on this issue. Receipt of this letter may please be acknowledged. Hindi version is enclosed.