Modvat - Turnings and borings arising during manufacture of aluminium pistons out of aluminium ingots cannot be permitted to be removed under Rule 57F(2) without payment of duty - Central Excise - 261/76/88-CX.8

Modvat - Turnings and borings arising during manufacture of aluminium pistons out of aluminium ingots cannot be permitted to be removed under Rule 57F(2) without payment of duty F. No. 261/76/88-CX.8 Dated 4-10-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Aluminium pistons are manufactured out of duty paid aluminium ingots in which MODVAT credit is availed of. During the PRB of manufacture of pistons, turnings and borings of aluminium arise. The question has been arised whether such turnings and borings can be removed under Rule 57F(2) without payment of duty or not. Under Rule 57F(2) either the inputs can be removed as such for after the inputs have been partially processed. Turnings and Borings can neither be said to be inputs as such or inputs which have been partially processed. The Board has, therefore, of the view that Turnings and borings arising during the process of manufacture of aluminium pistons out of aluminium ingots cannot be permitted to be removed under Rule 57F(2) without payment of duty. Such Turnings and borings can only be removed on payment of appropriate duty the ingots manufactured out of such turnings and borings would be chargeable to appropriate rate of duty. However, duty paid on ingots thus obtained can again be utilised for payment of duty on pistons. Practice of permitting turnings and borings under Rule 57F(2) without payment of duty may be stopped forthwith. Action may also be taken to recover duty on turnings and borings if not already paid.