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TMI Blog1992 (3) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... process for emergency supplies to various depots all over the country. At the time of removal of these inputs as such, they reverse the modvat credit in respect of the duty paid on these inputs as per the duty amounts evidenced in the Gate passes. Wherever the notional higher credits have been taken in respect of these receipts, they also reversed the higher notional credit so taken. However, the Department objected to the quantum of credit reversed, by pointing out the provisions of Rule 57F(1)(ii) and stated that these inputs are to suffer duty as per the rate and as per the value on the date of clearance, since they are deemed to be the manufacturer of these inputs, in terms of the aforesaid rules. In the adjudication proceedings held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is on the manufacturer. The receiver of the inputs cannot be charged to duty again. It is also a settled law that duty cannot be charged twice on the same goods. It has also been held by the Tribunal that the inputs continue to retain the duty paid character, notwithstanding the fact proforma credit has been given in respect of the duty paid on such inputs. On these grounds he submitted that provisions of Rule 57F(1)(ii) cannot be interpreted to mean that the Department can demand the duty for an amount more than the amount of duty taken as credit on these inputs, overlooking the other provisions of the Act. 3. Shri Naik, the ld. JDR for the Department submitted that the modvat scheme is a beneficial scheme and it is self-contained sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs have been manufactured in the said factory. Provided that where the inputs are removed from the factory for home consumption on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such inputs under Rule 57A (emphasis supplied) 5. From the above, it is clear that if the inputs are removed, as such, for home consumption, what is contemplated is not mere reversal of credit originally taken. The Rule envisages clearance of such inputs on appropriate duty of excise, as if such inputs have been manufactured in that factory. This deeming concept enables the authorities to insist on the formalities required to be complied with, before permitting removal of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input taxation, by providing credit of duty paid on inputs for utilisation towards payment of duty on the final product. It is not meant for stock and sale. The name itself suggests that it is a modified value added tax scheme. Hence, when the inputs which are received for the declared objective of utilisation in the final product by the receiver of input, are to be allowed diversion for home consumption, as such, it can be done only subject to specific provision laid down in Rule 57F(1)(ii). When the rule introduces the deeming concept of treating such inputs in respect of which credit has been taken on par with the goods manufactured in the recipient factory and the recipient of such inputs on par with the manufacturer of inputs, he has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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