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TMI Blog1993 (2) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... en. Hence, for each M. Ton of the copper strips cleared, the duty credit taken was in excess by Rs. 1,700/- P.M.T. which was used against the clearance of paper covered copper strips falling under different Chapter heading, on which the duty incidence was 15% ad valorem and the duty incidence on such paper covered copper strips is higher than the input credit available at the rate of Rs. 6,200/- per M.T. Likewise, in the case of winding wire which is the final product, the duty leviable is 5% ad valorem and the saved credit on this product is also utilised in the clearance of the other final products. Hence, the duty demands were issued within the time-limit for recovery of the alleged saved credit, which has been utilised for products, other than those, wherein the quantum of inputs has been used. In the adjudication proceedings held by the Asstt. Collector, two demands totalling Rs. 45,414.62 was confirmed. However, in the appeal before the Collector (Appeals) by the respondents, the appeal from the respondent was allowed on the ground that as per the provisions of Rule 57F(1), the inputs in respect of which the credits have been allowed should be used in or in relation to the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilised in the manufacture of copper wire of different gauges the duty credit saved in respect of copper wire of one guauge cannot be utilised in respect of the duty payable on copper wires of the other gauges. He also produced a copy of the Trade Notice reproduced in the Book Modvat Credit of Money Scheme brought out by Taxmann. 4. Shri Sheth, the ld. advocate, appearing for the respondents, contended that the Chapterwise maintenance of RG 23A Part II is not contemplated under the Rules. Only in the Ministry s letter dated 21-5-1986, it is laid down that Part I can be common but Part II has to be separate for each of the final product. Even this requirement has been subsequently changed under the Ministry s letter F. No. 21/4/87-TRU dated 20-4-1987, according to which the manufacturers should submit a monthly statement along with RT. 12 indicating the duty separately in respect of the final products. However, he pleads that as per Rule, there is no such requirement. There is also no requirement of one to one co-relation. One to one co-relation has been specifically dispensed with because of the specific amendment to Rule 57P(3)(i) by Not. No. 197/86 dated 14-3-1986. After t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other products. 6. Though case laws have been cited by both the sides, I find that the issues considered in those case laws are somewhat different. In those cases, the inputs have been brought in either under Not. No. 200/79 or under proforma credit for use in the manufacture of a final product. The duty credit has been utilised instantaneously, but stock of inputs was lying, when the duty on the final products came to be exempted. But in this case, all the final products are liable to duty but at varying rates. The facts being different, it would be more prudent to consider the issue independent of the case laws in the context of the various provisions of the Modvat Rules. It would be necessary to take a composite view of the provisions of all the Rules contained in Chpt. AA of the Central Excise Rules envisaging the Modvat Scheme. This is what I propose to do. 7. Under Rule 57A, duty paid on the inputs utilised in or in relation to the manufacture of final product could be utilised as credit towards payment of duty of excise leviable on the final product. There is also a proviso to sub-rule (1) of Rule 57A which reads as below :- Provided that the Central Government may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve given the description copper wire rods and also final products, where this common input has been utilised. Now the question is, whether the register is required to be maintained productwise and a statement is required to be given for productwise utilisation of credit and since this has been omitted to be done, there is a saving, which could not be utilised towards payment of duty for other products. Though no such requirement is forth coming under the Rule 57F(3). I looked into the provisions of Rule 57G. Sub-rule (3) of Rule 57G only talks of the maintenance of an account in form RG 23A Parts I II. Chapterwise maintenance of the accounts or productwise co-relation are not contemplated in the Rule. All the same, if the input, which has been brought is common for both dutiable as well as exempted products, there could be a justification for maintenance of separate accounts for purpose of reversal of credit in respect of the exempted final products. Here, even that requirement is not needed, because admittedly all the final products are dutiable. The Ministry, themselves have permitted maintenance of the accounts chapterwise. Even in one chapter there could be many sub-headings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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