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TMI Blog1992 (2) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of the authorisation granted by the Collector of Central Excise, Calcutta-II. By that Appeal, the Assistant Collector had challenged the correctness of the order passed by the Assistant Collector of Central Excise, Howrah South Division granting Modvat Credit on Alkyd Resin, Maleic Resin and Fumaric Resin manufactured and used as inputs in the manufacture of paints and varnish. The stand taken by Revenue before the Collector (Appeals) was that in terms of Notification 53/88, dated 1-3-1988, the goods Alkyd Resin, Maleic Resin and Fumaric Resin were exempt form duty and, hence the Assistant Collector was not correct in allowing Modvat credit on such goods captively used for the manufacture of the final products. This plea found favour wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were obtained as intermediate products in the manufacture of paints. The fact that the resins were exempt from duty was not held to be a factor for denying the benefit of Notification 201/79 for the goods used in the manufacture of paints via the stage of resins. Shri Bagaria pointed out that the stand taken by the Collector (Appeals) would make Rule 57D(2) nugatory. He also cited the following decisions covering similar issue - (1) 1992 (59) E.L.T 168 - Collector of Central Excise v. Indian Aluminium Company; (2) 1992 (58) E.L.T 300 - Collector of Central Excise v. D.C.W. Ltd.; (3) 1992 (62) E.L.T 753 (Tribunal-NRB) - Jain Spun Pipe Co. v. Collector of Central Excise; (4) 1978 (2) E.L.T. 39 (Allahabad) - Nagrath Paints v. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of final products though after passing through the stage of the intermediate products. Shri Bagaria pleaded that their Appeal be allowed in view of the clear provision of law which has been accepted in the several decisions cited by him. 4. Shri N.K. Mandal, learned Departmental Representative replied to the arguments advanced by the learned counsel. He referred to the submissions made during the hearing of the Stay Petition on behalf of the respondent Collector that the scope of Rule 57D(2) would extend only to intermediate products which arise in the course of manufacture of the final product. This will mean that such intermediate products should arise as a chance or accidental by-product. It should not be the result of a deliberat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. are cleared from the factory where they are produced, they are final products and the Tariff classification and Tariff becomes relevant for its assessment and clearance. But where such goods are not cleared outside but are captively consumed in the manufacture of the final products, they are intermediate products. Because they are classifiable under a Tariff Heading and are otherwise final products themselves is not inconsistent with their identity as intermediate products vis-a-vis the final product, paints. Rule 57D(2) specifically provides that credit shall not be denied on the ground that any intermediate product come into existence during the course of manufacture of the final product and that such intermediate product is exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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