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TMI Blog1991 (12) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 3402.90. According to the authorities in the process of manufacture 49% of the Oleum which was put in the manufacturing stream, came to be used up in the process of manufacture and the remaining portion emerged as spent acid. This spent acid was removed by the appellants without payment of any duty. The learned lower authority has restricted the eligibility of the MODVAT credit only to the extent of 49% out of the total quantity of Oleum put in the manufacturing stream and in respect of which MODVAT credit was taken in limiting it to the extent it actually got used up in the manufacturing process. The appellants have been charged with not having entered the spent acid in the RG. 1 Register, Modvat Register and RG. 23A, Part I and Part I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Remarks (1) (2) (3) 01 Spent Acid H 2 So 4 Duty paid Sulphuric Acid declared as non-excisable by the Asstt. Collector, CE, Anan-tapur. I.D.O. on clarification of the chemical examiner. He pleaded that the learned lower authority has demanded duty in terms of Rule 57-I read with Rule 9(2) and Section 11A. He has pleaded that the point at issue is regarding the wrong availment of the MODVAT credit and the question of invoking Rule 9(1), therefore, does not arise and that in any case the appellants had declared to the authorities that spent acid, which was produced in the factory, was as a result of the manufacturing process for the production of the finished product. He further pleaded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read in the manner he has pleaded. 4. We observe that the short point that falls for our consideration is whether the appellants have correctly taken the MODVAT credit and utilised the same for the purpose as envisaged in the MODVAT Scheme under the Central Excise Rules. We observe that under Rule 57A for the purpose of eligibility of the MODVAT credit the inputs and the finished product should be specified in the notification issued under the said Rule. It is the admitted position that both the inputs and the finished product are notified under the notification issued under Rule 57A. The operative portion of this notification issued under this Rule reads as under : ... the Central Government hereby specifies the final products desc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the inputs viz. Oleum for which they availed of the MODVAT credit had been consumed in the process of manufacture of the finished product. We observe that there is nothing in the Rules to suggest that MODVAT credit could be taken only for that portion of the inputs which got consumed in the manufacturing process. The learned lower authority has not cited any rule from which this assertion could be read. The learned lower authority has also held that the appellants had not declared to the Department the percentage of the Oleum that was consumed in the finished product. We observe that there is no provision requiring the appellants to declare the actual consumption of the material in the finished product. What is envisaged is that the input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a superior footing inasmuch as the input as has been taken into the manufacturing stream. For the purpose of MODVAT Rules, it makes no difference if the whole of the material put in the manufacturing stream has not got consumed and that in the nature of the manufacturing process part of it has emerged as a product which is described as spent acid. It is not the case of the Department that spent acid is Oleum which was the input taken. It may be something which may be akin to Oleum. Even if it had emerged only as Oleum, in terms of Rule 57F in case it was cleared outside the factory, all that had to be done was that the same had to suffer duty as if it was the produce of the appellants factory. But there would be no question of reversing th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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