SSI units working under notification No. 175/86-C.E., dated 1-3-1986 opting for Modvat but not availing credit reg. - Central Excise - 345/11/89

SSI units working under notification No. 175/86-C.E., dated 1-3-1986 opting for Modvat but not availing credit reg. F. No. 345/11/89 Dated 7-6-1989 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : SSI units working under notification No. 175/86-C.E., dated 1-3-1986 opting for Modvat but not availing credit reg. A reference has been received from the Collector, Central Excise, Jaipur intimating that there are a number of units availing exemption under notification No. l75/86-C.E., dated 1-3-1986 which have filed a declaration under rule 57G of the Central Excise Rules, 1944 for availing credit of the duty paid on the inputs under rule 57A, but do not actually avail the credit of the duty paid on the inputs used in the manufacture of specified goods as these are purchased from the open market without any duty paying documents. However, these units still pay duty on the first clearances of rupees fifteen lakhs at the rate specified under sub-clause (i) of clause (a) of the notification No. 176/86-C.E., dated 1-3-1986. This is being done so as to enable their customers to avail the notional credit under rule 57B. Audit has raised objections in such cases on the ground that only in a case where the manufacturer avails of the credit of duty paid on the inputs used in the manufacture of specified goods, he has to pay duty on first clearances of Rs. 15 lakhs, otherwise, the unit should clear the goods in terms of sub-clause (ii) of clause (a) of the notification. 2. Details of similar instances in your Collectorate along with your views may be sent to the Board by 30-6-1989.