9911796707
TMI Blog1993 (12) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... f the finished product viz. Pumps and in respect of which they had earlier taken Modvat credit. The original authority s findings in this regard is as under : The essence of the Modvat scheme is to prevent cascading effect of Tax on the final product. It is, therefore obvious that where the final product is exempted there can be no cascading effect and accordingly it is redundent to allow credit on inputs which are used in the exempted goods. Once it is known that the final product is exempted the credit already allowed on the inputs which are likely to be issued in the exempted goods has to be naturally expunged. This is what the show cause notice proposed to do. As the time of the company ceasing to avail Modvat credit and clearing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to be issued on the exempted goods has to be naturally expunged. In this case, on the date of availing the exemption on the end products, i.e., 1-5-1988, the Modvat credit had already been taken and utilised. Therefore, the stock lying with the assessee, even if it ceased to be `inputs from that date, would be of no consequence let alone warranting demand of duty on such goods. At the most, the excise authority can ensure that the credit lying in RG 23A Part II should lapse and should not be allowed to be used for further clearances which the lower authority has already done. The reliance placed by the appellants on the decision of Honourable Tribunal in the case of M/s. Wipro Information Technology reported in 1988 (33) E.L.T. 172 is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying in stock and there was also some Modvat credit outstanding in RG 23A Part-II. He has pleaded that so far as the Modvat credit which was outstanding is concerned the same can be taken to have lapsed inasmuch as the respondent had opted for the exemption notification and they were no longer working under the Modvat scheme. He, however, pleaded that so far as the recovery of the Modvat credit in respect of the inputs which were lying in stock are concerned the same is not warranted in view of the fact that at the time when the respondent opted for Modvat credit scheme they were eligible to take Modvat credit in respect of the inputs in question and the same was correctly taken and they utilised the Modvat credit so taken for payment of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that duty could be demanded in respect of the inputs lying in stock treating the same as if these are the manufacture of the said factory in terms of Rule 57F(2). Our finding in this regard is as under : We observe that so far as this sub-rule is concerned inputs in respect of which Modvat credit has been taken have been relieved of the duty burden and the same are deemed to be the manufacture of the respondents and if they are cleared from the factory either for home consumption or for export, duty will have to be charged in respect of the same treating them as the manufacture of the Company and this duty could be even more than the Modvat credit but it cannot be less than the Modvat credit taken. The fact that the aerated water was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
