9911796707
TMI Blog1995 (5) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... After the final product came to be exempted from the excise duty or chargeable to nil rate of duty, the credit already taken on the inputs which were lying in the stock on the date of availing of the exemption of duty on the finished goods should be directed to be reversed. 3. Shri Chakravarthy, the learned Consultant, adopted the reasonings of the authorities cited in the impugned order, namely, the ruling of the South Regional Bench in the case of CCE, Bangalore v. M/s. Wipro Information Techno- logy reported in 1988 (33) E.L.T. 172. 4. On going through the entire records and after hearing the pleas of the parties, we find that the respondent was eligible to take credit on the inputs at the time when the credit was taken and the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll in stock in terms of Rule 57F. 6. We have considered the pleas made by both the sides. The issue as of now is covered by the ruling of this Bench in the case of CCE v. Becon Weir referred to supra wherein we have held as under : We observe that in a number of similar cases we have held that once it can be shown that Modvat credit was correctly taken at the time when the appellants were working under the Modvat scheme and the same was also correctly utilised for paying duty towards the notified finished products in respect of which necessary declaration had been filed, the question of recovery of the utilised Modvat credit does not arise. We have held that there is no one to one co-relation of input and output and the moment Modvat cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit under Notification 203/87 does not in any way change the status of the inputs which are lying in stock. These by fiction created under the rule have to be treated as the manufacture of the respondent s factory and therefore when these are cleared for home consumption, from the factory, the same have to be charged to duty as if the same are the manufacture of the said respon- dents manufacturing unit. Under Rule 49 consumption of the goods in the factory has to be deemed to be as if these goods have been issued out or removed from the factory place or premises for home consumption. In our view, provisions of Rule 57F(2) of the Central Excise Rules, 1944 will continue to operate in respect of the inputs on which Modvat credit has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above) in the case of Kirloskar Oil Engines Ltd. has observed that they are not pronouncing finally on the issue as to the eligibility to MODVAT Credit in respect of inputs which were lying in stock when the exemption notification was issued after the receipt of the goods in the factory and where MODVAT Credit had been utilised. They have, however, while touching upon the issue before us and to which reference was made before the Larger Bench also observed as under in para 17.2 of their order : We may only say at this stage that the provisions of Rule 56A provided [see sub-rule (3)(vii) of Rule 56A] for demand of duty on unutilised inputs brought under Rule 56A on discontinuance of procedure under Rule 56A either by the manufacturer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the manufacture of the Respondent s factory and therefore when these are cleared for home consumption, from the factory, the same have to be charged to duty as if the same are the manufacture of the said Respondents manufacturing unit. Under Rule 49 consumption of the goods in the factory has to be deemed to be as if these goods have been issued out or removed from the factory place or premises for home consumption. In our view, provisions of Rule 57(2) of the Central Excise Rules, 1944 will continue to operate in respect of the inputs on which MODVAT Credit has been taken. The only course open to the Revenue is to demand duty in respect of the goods when these are taken and utilised in the said factory. What we are saying is that so f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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