9911796707
TMI Blog1993 (5) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, molasses is first converted into industrial alcohol, which is, thereafter, used in the manufacture of VAM. It is alleged by the Department that molasses is first converted into industrial alcohol, which is not liable to Central Excise duty but subject to State Excise. In the adjudication proceedings held by the Asstt. Collector he held that first cycle of production is completed and alcohol comes into existence and hence the molasses is used only in alcohol, which is not liable to Central Excise duty and therefore Modvat credit of duty paid on molasses is not available for payment of duty on VAM. Accordingly, Modvat credit taken was ordered to be reversed. The said order was also confirmed by the Collector (Appeals). Hence, the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in respect of any inputs shall not be denied or varied on the ground that any intermediate products have come into existence during the course of manufacture of the final product and that such intermediate products are for the time being exempt from. the whole of the duty of excise leviable thereon or chargeable to nil rate of duty : Provided that such intermediate products are used within the factory of production in the manufacture of final product on which the duty of excise is leviable whether in whole or in part". However with effect from 6-10-1988, proviso to sub-rule (2) of Rule 57D was amended as below : Provided that such intermediate products are - (a) used within the factory of production in the manufacture of final p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpreting the provisions of Rule 57D even during the period prior to the amendment. The Special Bench has not considered the implication of this amendment in the proviso to Rule 57D. He also pointed out that it is not the case of the appellants that industrial alcohol has been specified as an input or as a final product under the notification issued under Rule 57A. Hence, going by this clarificatory amendment, the benefit cannot be extended. 5. After hearing both the sides, we find that the very same issue has been considered by the Special Bench. They have gone into the same arguments advanced by the ld. SDR with regard to the interpretation of Rule 57D, as it stood prior to the amendment by way of Notification No. 26/88, dated 6-10-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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