9911796707
TMI Blog1994 (5) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... at the respondents cleared 18.346 MT of unbleached absorbent kraft paper from their factory under Rule 57F(1)(ii) during November, 1989 without payment of appropriate Central Excise duty on the allegation that they received the said kraft paper on payment of duty and availed of Modvat credit at the restricted rate of Rs. 800/- per tonne in view of Notification No. 149/87-C.E., dated 20-5-1987 and at the time of clearance of the same they paid the duty only equal to Modvat credit availed of by them that is to say at the rate of Rs. 800/- per tonne by debiting instead of paying the appropriate rate of duty leviable on the said goods at the time of clearance from the factory. Besides, according to Revenue the respondents also cleared 4059 Kg. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts have been manufactured in the said factory and further that as per Rule 9A(i) ibid the rate of duty and the Tariff Valuation shall be the rate and the valuation in force on the date of the actual removal of such goods from such factory or warehouse. In the instant case admittedly the respondents received the inputs at concessional rate from SSI Unit and cleared these inputs subsequently from their factory under the said rule at the same rate instead of paying full rate at which they were supposed to pay the duty inasmuch as the inputs are treated as deemed manufactured if these are cleared as such from the factory and the rate applicable will be effective rate and not concessional rate under Notification No. 175/86-C.E., as amended. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption on payment of duty of excise equivalent to the credit availed on such inputs. In this premises he submitted that if the inputs are not used in or [in] relation to the manufacture of final product by the respondents and the amount of duty paid on clearance of such inputs is more than that of the amounts of credit taken then it will become an absurd proposition. To butteress his submission he cited the case of Bengal Immunity Co. Ltd. v. State of Bihar - AIR 1955 SC 661 wherein it was held that legal fictions are created only for specific purpose and these must be limited to that purpose and should not be extended beyond that legitimate field a case followed in the case of I.T. Commr., Kanpur v. M.I.R. Industries (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such inputs under rule 57A". 7. By Notification No. 4/92-C.E., dated 1-3-1992 the following sub-rule (1A) has been inserted which reads as follows : (1A) Notwithstanding anything contained in clause (ii) of sub-rule (1) the inputs in respect of which a credit of duty has been restricted in terms of proviso to rule 57A, may be removed subject to prior permission of Collector of Central Excise from the factory for home consumption on payment of duty of excise equivalent to the credit availed on such inputs. 8. Explaining the effect this amendment in the rule a two Member Bench of this Tribunal in the case of Modi Rubber Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bengal Immunity Co. Ltd. and I.T. Commr., Kanpur, supra, do not advance the case of the respondents as no body is extending the legal fiction beyond the legitimate filed in the instant case. 10. In the result, we set aside the impugned order-in-appeal so far as it relates to the setting aside of the demand and restore the order of the Additio- nal Collector so far as it relates to the demand of Central Excise duty amounting to Rs. 43,535.94 and pass no order regarding personal penalty as neither in the Memorandum of Appeal nor during the course of arguments it was contended by the Revenue that the personal penalty should be imposed on the respondents. 11. The appeal stand disposed of accordingly. - - TaxTMI - TMITax - Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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