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TMI Blog1996 (3) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in the manufacture of Synthetic Rubber and they availed MODVAT Credit under Rule 57A of the Central Excise Rules, 1944. They had taken Credit of countervailing duty paid on 2 imported inputs namely, Hegatreat and Hegafilm for alleged use in the manufacture of Synthetic Rubber during the period March, 1986 to May, 1989 in respect of Appeal E/385/92 involving duty of Rs. 6,65,014.19 and during the period April, 1990 to August, 1990 amounting to Rs. 1,71,727.70 in respect of Appeal E/384/92. The department took the view that these two items were used in the generation of steam for running the machines and not in the manufacture of Synthetic Rubber and as a consequence had issued the show cause notices and after due consideration t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he final product and hence they cannot be treated as input in the manufacture of the final product namely, Synthetic Rubber . 3. In Appeal E/385/92, the appellants have raised a contention that the Superintendent of Central Excise was not competent to issue show cause notice cum demands notice for a period beyond 6 months as provided under Section 11A of the Act and Rules framed thereunder. It was also contended before the Learned Collector that in the review petition filed by the department under Section 35B(4) of the Act, the department had only raised the question of limitation. Therefore, the Collector should have considered only this question, and as merit has also been dealt with, therefore, the order is bad in law. In E/384/92-NB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A or Rule 57-I cannot be invoked. Therefore, it is his submission that the demands raised in Appeal 385/92 are required to be set aside solely on this ground alone. It is his further submission that both the inputs get consumed in the manufacture of steam. Hence, they are required to be considered as inputs for the manufacture of the final product namely, Synthetic Rubber . He relied on the judgment rendered in the case of Associated Cement Co. Ltd. v. Collector of Central Excise as reported in 1991 (31) ECR. 590 wherein the chemicals used for treatment of water, were held entitled for the benefit of the MODVAT Credit. He also referred to the judgment rendered in the case of Straw Products Ltd. v. Collector of Central Excise, as reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in steam generation system. He submitted that the items are being used for maintenance and efficiency of the machines and the same are excluded from the purview of the Rule 56A. As regards the appeal E/385/92 is concerned, the Learned DR sought for remand of the case. 7. We have carefully considered the submissions made by both the sides and have perused the citations relied by the Learned Counsel. As regards the plea that the demands raised in Appeal E/385/92 are barred by time and that the Collector had proceeded beyond reference is required to be accepted by us. The Learned Assistant Collector has clearly held that the department had not alleged suppression of facts or misdeclaration or misstatement as required under Proviso to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us condensors and for maintaining desired temperature of polymerisation reaction for manufacture of synthetic rubber. Hegatreat, is therefore, essential in the manufacture of synthetic rubber and hence, is to be treated as input in relation to the manufacture of our finished products synthetic rubber. HEGAFILM Hegafilm is used as a corrosion inhibitor in steam generation system. It inhibits corrosion by forming a non volatile film on the surface of the metal which comes in contact with steam/steam condensate. Steam generated is used in all the process plants in the manufacture of our finished product synthetic rubber. Hegafilm is, therefore, essential in the manufacture of synthetic rubber and is, therefore, to be treated as input i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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