9911796707
TMI Blog1994 (2) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... credit correctly taken and utilised but for becoming the final products exempt from payment of duty at a later stage. In the instant case the credit was correctly taken as per provisions of Rules 57A and 57G and utilised for payment of duty on final products as per provisions of Rule 57F. The ratio of judgments as cited above is squarely applicable in this case. In view of the above facts, I find that the impugned order is not maintainable. It is, therefore set aside. 2. Briefly stated the facts of the case are that M/s. S.N.T. Plywood Industries are manufacturers of wood and articles of wood and were availing modvat credit of duty paid on inputs used in the manufacture of the final products. During the year 1990-91, the respondents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of duty paid inputs without payment of duty was in order; that contravention of Rule 57C applies only when the product is initially exempt from duty; that Notification No. 175/86 was a conditional notification. 3. Shri V.K. Sharma, the ld. SDR appearing for the appellant submitted that Rule 57C provided No credit of the specified duty paid on the inputs used in the manufacture of final product other than those cleared either to a unit in a free trade zone or to a 100% export oriented unit shall be allowed if the final product is exempt from the whole of duty of excise leviable thereon or if chargeable to Nil rate of duty. He submitted that in the instant case the inputs were used in the manufacture of the final product which became e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed product as perhaps the duty on the finished product was higher than the duty on the inputs. Though some inputs will remained utilised in the finished product in stock as well as in the finished product in the pipeline but there was no credit of inputs due in the RG 23A Part II. In this view of the matter, the ld. SDR submitted that when the finished product was exempt modvat credit of duty used in this finished product will not be admissible to the respondent in view of the specified provision of Rule 57C. Referring to the various case law relied upon by the appellant, the ld. SDR submitted that the facts in the cases cited and relied upon by the respondent were different from the facts in the instant case. Reiterating the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit is to be taken the finished specified goods can be cleared under a general exemption notwithstanding the same being specified under Rule 57A. As mentioned earlier, we, therefore, hold that the credit taken was correctly taken and the only fault that can be found by the authorities is with reference to the utilisation of the same. The manner of utilisation of the credit is specified under Rule 57F and under Rule 57F(3)(i) the same can be used for payment of duty on any of the final product in or in relation to the manufacture of which such inputs are intended to be used in accordance with the declaration filed under sub-rule (1) of Rule 57G. It would be seen that all that the assessee has to show is that the credit has been utilised tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some situations are different in as much as in the first case, the exemption of the finished product was conditional and in the second case the examination was limited to the provision of Rule 56A. The basic issue is as to how to reconcile with Rule 57C read with Rule 57A and 57G. Rule 57A and 57G provide that modvat credit of duty paid on inputs can be taken if the inputs as well as the finished product are specified and a declaration has been filed declaring the inputs as well as the finished product. In the instant case, the conditions under Rules 57A and 57G are fully met. Only the manner of utilisation under Rule 57F and the taking of credit under Rule 57C is contested. Rule 57C provides that no credit of duty shall be allowed if the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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