1987 (5) TMI 130

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..... omposite unit comprising mainly of pulp mill and paper machine section. For the preparation of pulp certain chemicals and other raw materials are used. The Appellants have several units in Bhopal which manufacture kraft paper and paper boards. Good quality pulp is needed for the manufacture On some occasions the pulp is issued from Jaykaypur factory to Bhopal factory. The Appellants are claiming the benefit of Notification No. 118/75 in respect of the pulp sheets cleared. The local officers were of the view that proforma credit taken in respect of the duty paid inputs used in the manufacture of pulp sheets cannot be allowed and the credit already taken should be reduced by an amount which is equivalent to the duty paid on the inputs contain .....

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..... se is leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred as the inputs ) have been used, from so much of the duty of excise leviable therein as is equivalent to the duty of excise already paid on the inputs. Provided that the procedure set out in the Appendix to this notification is followed : Provided further that nothing contained in this notification shall apply to the said goods which are exempted from the whole of the duty of excise leviable thereon or are chargeable to nil rate of duty." Notification 118/75 exempted goods falling under Item 68 manufactured in the factory had intended for use in the factory .....

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..... T.I. 68 and availed the benefit of 201/79 in respect of inputs, namely the chemicals. They have not done so. Having removed the pulp as such to the Bhopal factory, the Item 68 goods contemplated under Notification 201/79 would be the pulp and not the chemicals used in the manufacture of pulp. Notification 201/79 exempts excisable goods in which the Item 68 goods had been used, from so much of duty of excise leviable thereon as is equivalent to the duty already paid on the inputs. In the present case their input at the Bhopal factory is the pulp and not the chemicals. The lower authorities have relied on the proviso to Notification 201/79 to deny the benefit of the exemption. Of course, Notification 201/79 speaks of the said goods" and in .....

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