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TMI Blog1991 (12) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to exemption from payment of duty on waste and scrap of brass and aluminium under Notification Nos. 172/84 and 182/84 respectively, since they availed Modvat credit on raw materials in respect of waste and scraps. The undisputed facts are that the appellants are engaged in the manufacture of goods falling under Chapters 74, 84, 85 86 of the Schedule to the Central Excise Tariff Act, 1985. During the course of such manufacture, waste and scrap of brass and aluminium also arise which fall under sub-heading Nos. 7402 and 7602 respectively. The appellants filed classification lists claiming exemption under Notification Nos. 172/84-C.E., dated 1-8-1984 and 182/84-C.E., dated 1-8-1984 respectively. The claim of the appellants was rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82/84 waste and scrap of aluminium are manufactured from goods falling under heading or sub-heading Nos. 76.01 to 76.09, 76.11 and 8312.11 on which duty has been paid. He said that since the appellants have fulfilled the conditions under the said notifications in respect of waste and scrap, the same goods can be cleared at Nil rate of duty as envisaged under the said Notifications. It was submitted that since no restriction for availing Modvat credit has been incorporated in the said notifications unlike some other notifications wherein such specific conditions have been included, the goods should be allowed to be cleared without payment of duty. He contended that the findings of the Collector `once the Modvat credit is availed of by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vol. 26 and also referred to the advice given by the Attorney General and same has been accepted by the Ministry on this issue as per letter F. No. 238/4/85-CX. 7 (part-II), dated 20-12-1985. Further he filed copy of the Circular No. 29/90-CX. 8, dated 8-5-1990 which reads as under :- Attention is invited to instruction issued vide Board s F. No. 238/4/85-CX. 7, dated 20-12-1985 wherein it was clarified that raw materials and component parts on which proforma credit has been taken under Rule 56-A, could not be treated to be non-duty paid. It has been decided by the Board that instructions dated 20-12-1985 will mutatis mutandis apply to Rule 57A as well. 4. Arguing for the revenue Shri M.S. Arora, learned J.D.R. submitted that under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh these notifications we cannot see how a prohibition or restriction of the aforesaid nature can be imported into Notification Nos. 172/84 and 182/84. Any attempt to do so in view of the provision in Rule 57F(4)(a) is, in our opinion, not permissible. According to Rule 57F(4)(a) that the waste is to be removed on payment of duty only if it is otherwise dutiable. Dutiability has always to be seen not only with reference to the Tariff Item but also with reference to an Exemption Notification under Rule 8(1). 6. We are unable to agree with the contention of the revenue that once the Modvat credit is availed of, the goods in respect of which such credit has been taken cannot be considered to be duty paid particularly when notification confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out clearly as has been in the case of Rule 56A as it was rightly observed by the Collector in the impugned order. In view of this anomalous position, the Board has clarified the position that the waste scrap arise in the course of manufacturing other finished products are exempted despite the fact that Modvat credit has been availed of as per advice given by the Attorney General on the issues referred to him. The advice given by him are relevant and strengthens our view. The relevant portion of the said opinion is reproduced as under :- The Central Excise duty is an indirect tax which is ultimately borne by the consumer. To levy excise duty both on the inputs and the ultimate manufactured product, into which the inputs have gone, wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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