9911796707
TMI Blog1990 (8) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... ollector of Central Excise, Coimbatore. 2. Brief facts of the case are that the appellants are manufacturers of various items classifiable under Chapter 84 and 85 and they were availing MODVAT facility under deemed credit on aluminium alloy castings purchased from manufacturer without any duty paying documents and which were clearly recognisable as non-duty paid or charged to nil rate of duty as seen from the purchase invoice/bills. The appellants contended before the lower authorities that the aluminium alloy castings supplied to them were exempted from payment of duty inasmuch as the said castings were obtained from duty paid aluminium ingots falling under Chapter Heading No. 76.01 and therefore, the credit taken by them was correct. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alloy castings. The said castings being chargeable to nil rate of duty, the respondents are entitled to take credit of nil rate of duty, which is of no consequence in the present matter. Coming to the contention that because ingots were duty paid, castings are also to be held as duty paid, I am unable to agree to this contention of respondents, as castings are different excisable goods than aluminium ingots. The Government of India s letter referred to by them is in respect of scrap and it cannot cover the respondents contention as stated above. The said inputs having been received from the manufacturers thereof, under cover of invoices showing no payment of duty, they are clearly recognisable as non-duty paid." He, therefore, disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86-C.E., dated 1-3-1986. They have pleaded that once it is held that Aluminum ingots out of which the castings were produced had suffered duty, notwithstanding the fact that the castings were cleared without payment of duty in terms of exemption notification, the same should be deemed to be duty paid. In this connection he referred to the directions issued by the Govt. of India, which finds mention in the impugned order of the lower appellate authority in F. No. 822/5/86-TRU dated 7-4-1986 whereby it has been notified that some of the specified inputs purchased from outside and lying in stock on or after 1-3-1986 with the manufacturers manufacturing the final products specified in the Notification No. 177/86-C.E., dated 1-3-1986 might be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty which was paid on the raw materials out of which the input in question viz. Aluminum castings emerged. There is no warrant in law for extending the benefit of the MODVAT credit in the way the appellants have sought for in the appeal. It is not the case of the appellants that the goods were purchased from the open market and were not from a factory and that in terms of Rule 57G(2) they will become eligible for the MODVAT credit. The Rule 57G(2) which makes a provision for the deemed credit reads as under : A manufacturer who has filed a declaration under sub-rule (1) may, after obtaining the acknowledgement aforesaid, take credit of the duty paid on the input received by him: Provided that no credit shall be taken unless the inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warehouse as are clearly recognisable as being non-duty paid. In the MODVAT Scheme since the benefit of credit is sought to be given for that quantum of duty which has been paid towards the goods or which is otherwise directed to be given in terms of the Rules, it has to be held the term non-duty paid refers to the goods where numerically no duty has been paid. As it is under Rule 57C no credit of duty is to be allowed if the final product is exempt from the whole of excise duty leviable thereon or if chargeable to Nil rate of duty. Thus if the inputs are used for the exempted goods, the inputs are not eligible for the benefit of MODVAT credit and the question of carrying forward the duty paid on the inputs, which resulted in the producti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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