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TMI Blog1990 (10) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... laminations for the manufacture of Stators and Rotors which in turn were fitted to the electric fans. The appellants were paying duty on stators and rotors, though at the intermediate stage. The Assistant Collector, under his letter dated 8-11-1980 granted permission in respect of availing of proforma credit for the duty paid on stampings and laminations utilised in the manufacture of stators and rotors captively consumed for fitment to the electric fans. However, by another letter dated 23-1-1980, the Assistant Collector refused permission for availing of poroforma credit in respect of stators and rotors used in the manufacture of electric fans on the ground that stators and rotors were totally exempt, if they were captively consumed in the manufacture of electric fans as per the provisions of Notification No. 28/69. Hence the credit of duty paid on stators and rotors used in the manufacture of electric fans was refused. The appellants however filed a representation against the order of the Assistant Collector refusing proforma credit in respect of duty paid on stators and rotors. Shri Barucha, the Ld. Advocate, stated that the Collector also took up the matter with the Board. Mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s letter referred to by him and also through the relevant Exemption Notification Nos. 28/69, 124/65, 95/79 and 110/80. He contended that though stators and rotors captively consumed in the manufacture of electric fans are exempted under Notification No. 28/69, there was also another exemption notification namely Exemption Notification No. 124/65 during the material period which provided for payment of duty on such stators and rotors and availing of set-off of such duty paid on these component parts towards the duty payable on electric fans. When two streams of exemptions are available, it is open for the assessee to choose the stream which is convenient and expedient to him. They therefore referred to pay duty on the stators and rotors at the intermediate stage so that they could claim the set-off under Notification No. 124/65. Moreover, during the material period Notification No. 95/79 specifically allows set-off of duty paid in respect of stampings and laminations used in the manufacture of electric motors. Further by a proviso to the Notification, the procedure to be followed is given as Rule 56A. Thereafter, Notification No. 110/80 amended the aforesaid Notification No. 95/79 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flagrantly disregarded the order of the Assistant Collector and went on taking the credit. Hence this is in gross violation of the provisions of the Central Excise Rules with an intention to evade duty and hence the extended period has been rightly invoked. On merits, he contended that since the stators and rotors captively consumed are totally exempted, there is no question of extension of credit in respect of exempt items and hence the Collector was right in demanding duty and imposing penalties. Shri Arya also submitted that the appellants have claimed refunds of duty paid on stators and rotors on account of exemption under Notification No. 28/69 and they are vigorously pursuing the same in that regard. Hence, if the Collector s order is not sustained, this will amount to virtually giving proforma credit in respect of the amount which they are seeking as refunds. Hence the Collector s order should be upheld. 9. Shri E.P. Barucha, the Ld. Advocate, in reply stated that they would be withdrawing all the refund claims filed in respect of duty paid on stators and rotors at the intermediate stage used captively in the manufacture of electric fans, once the issue is decided in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instructions, if a manufacturer of electric motors who also manufacture electric fans within the factory of production, wishes to pay excise duty on such electric motors in order to avail of the benefit of duty concessions in terms of Notification No. 95/83-C.E., dated the 1st March, 1983, such an option cannot be legally denied to him. This position has been confirmed by the Law Ministry. 11. The Collector does not appear to have properly considered any one of the above, in his order. It is also pertinent to note that these clarifications have been issued by the Ministry, particularly the later one has been issued in consultation with the Law Ministry. We also took note of the fact that it is a settled law that if the inputs go through the intermediate stage, which are exempt, duty paid thereon can be given credit, so long as the intermediate products are used in the manufacture of dutiable final product and they are not removed at the intermediate stage. In view of the settled legal position, stampings and laminations used in the manufacture of electric fans through the stage of stators and rotors can get the benefit, particularly after the issue of Notification No. 110/80. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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