9911796707
TMI Blog1995 (2) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... . The appellants are manufacturing Nylon Tyre Cord Fabrics and polyamide chips and nylon filament yarn emerge as intermediate products. Polyamide chips emerging as intermediate product comes within the mischief of Chapter 34 of the Central Excise Tariff and would be eligible for MODVAT and so far as the nylon filament yarn is concerned it emerges as an intermediate product coming within the mischief of Chapter 54 of the Central Excise Tariff and is not eligible for MODVAT since the same is not specified either as an input or an intermediate product under the relevant notification in the Modvat Scheme. 2A. Shri Arvind P. Datar, the learned Counsel for the appellant submitted that the period involved in the appeal is October to November, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n input under the notification issued under Rule 57A for availing MODVAT credit. The learned Counsel submitted that the reasoning of the authorities below that the chain as it was from the initial stage of the input to the final stage of the manufacture of the end product should remain unbroken for the purpose of one becoming eligible to MODVAT credit is misconceived in law. The learned Counsel further contended that Rules 57A, 57C and 57D would make it clear that if the intermediate product emerging in the course of the manufacture of the final product has suffered duty, the manufacturer concerned would be eligible to take MODVAT credit on the duty suffered on such intermediate product if the same is used in the end product irrespective of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the goods for captive consumption, rejection of the appellant s claim for MODVAT credit on the duty paid on the initial input namely caprolactum is not sustainable in law or on facts. The learned Counsel reiterated that denial of MODVAT credit could be taken only when the intermediate products are exempted and also on those which are not specified under the MODVAT Scheme. Since the nylon filament yarn not specified under the MODVAT Scheme is not exempted, proviso to Rule 57D for denial of MODVAT credit to the appellant is not relevant and in this view the learned Counsel assailing the correctness of the orders of the authorities below contended that the appellant would be eligible to the MODVAT credit. The learned counsel also placed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same is used in relation to the manufacture of the end product nylon tyre cord fabric. A plain reading of clause (2) of Rule 57D(2), would make it clear that the intermediate product cannot be denied MODVAT credit if the same is used in the manufacture of final product on the ground that such intermediate products are for the time being exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty. To avail MODVAT credit in favour of the exempted intermediate product emerging in the course of the manufacture of the final product, such intermediate product should be used in relation to the manufacture of the end product subject to the conditions set out under the proviso to Rule 57D(2) whereunder suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of no avail in this case because that was a case arising under a Reference Application and the Tribunal rejected the Reference Application on the ground that no question of law arose out of the impugned order concerned. We are not able to see how the rejection of the Reference Application by the Single Member of the Tribunal in Polychem Ltd. case on grounds that no question of law arose mentioning reference would help the appellant in support of the plea canvassed before us particularly with reference to the eligibility of the appellant to take MODVAT credit on the duty suffered by an intermediate product which is not notified. 6. On a harmonious reading of the Rules 57A, 57C and 57D, it would be seen that the MODVAT Scheme applies only t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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