Utilisation of Modvat credit - Clarification regarding - Central Excise - 264/47/88-CX.8

Utilisation of Modvat credit - Clarification regarding F. No. 264/47/88-CX.8 Dated 5-10-1989 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Utilisation of Modvat credit - Clarification regarding. I am directed to say that doubts have been raised as to whether the unutilised excess credit on Copper wires, thicker than 2mm can be utilised for payment of duty on copper wires, finer than 2mm, manufactured out of copper bar/wire rods. The matter has been examined in consultation with the Comptroller and Auditor General of India. It is observed that sub-rule 3 of Rule 57F of the Central Excise Rules, 1944 clearly states that the credit of specified duty allowed in respect of any input may be allowed to be utilised towards payment of duty of excise on the final product in which such input has been utilised. Inputs which are used in manufacture of copper wires thicker than 2mm cannot be said to used in the manufacture of copper wires finer than 2mm. Therefore credit earned on inputs used in wires thicker than 2mm cannot be allowed to be utilised for payment of duty on wires finer than 2mm. It has therefore been decided that the excess credit arising out of inputs used in manufacture of wires thicker than 2mm cannot be permitted to be utilised for discharging duty on wires finer than 2mm, manufactured out of wire bar/rod. This disposes of Principal Collector Delhi's letter C.No V(74) 30/1-CE/88/80, dated 11-3-1988. Field formations and trade interest may be informed suitably. Receipt of this letter may please be acknowledged.