9911796707
TMI Blog1996 (7) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... nd leading to the present decision is as follows : The applicants are engaged in the manufacture of tyres, tubes, flaps and other rubber products. They were availing of Modvat facility under Rule 57A of the Central Excise Rules, 1944. Prior to April, 1992 in respect of the inputs used in the manufacture of tyres/tubes cleared at nil rate of duty the applicants had been reversing the Modvat credit taken by making a debit entry in their RG 23A Part II register. However, by a letter dated 21-5-1992, they informed the Assistant Commissioner that they would not be reversing the amount of Modvat credit taken in respect of tyres/tubes cleared at nil rate of duty. The applicants were thereafter served with three show cause notices dated 22-9-1992 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the Commissioner of Central Excise, New Delhi, rejected the applicants contention and held that the amount specified in the show cause notices were recoverable since Modvat credit was wrongly availed by the appellants in each case in the respect of exempted tyres/tubes during the period specified in the respective show cause notices. 2. The Tribunal disposed of the appeals against the Commissioner s order by a common order upholding the order of the Commissioner. In so doing, the Tribunal followed its Larger Bench decision in the case of Kirloskar Oil Engines v. C.C.E., reported in 1994 (73) E.L.T. 835 in which it was held that in terms of Rule 57C of Central Excise Rules, Modvat credit is not admissible in respect of inputs which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended by Notification No. 97/89. This Notification exempts goods manufactured in a factory (referred to in the notification as inputs) used captively in the further manufacture of final products which are to be cleared on payment of duty in the same factory of production or in another factory of the same manufacturer. In the latter case, such inputs should be cleared under bond in terms of the procedure laid down in Chapter X of Central Excise Rules. In that case, the department denied Modvat credit of duty on basic inputs used in manufacture of intermediate goods removed to another unit under bond in terms of Notification No. 217/84. Since the intermediate inputs were cleared availing total exemption under the notification, the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase arising out of the Tribunal s order to the Hon ble High Court of Delhi : 1. Whether for the purpose of taking credit of duty paid on inputs under Rule 57A read with 57C of Central Excise Rules, the relevant stage is when credit of duty paid on inputs is taken, i.e. when the inputs are brought into the factory. Since at that stage, it cannot be said that the input will be used for manufacture of final products which are exempt or subject to nil rate of duty, whether credit taken can be denied. 2. Whether modvat credit once taken in accordance with the Rules cannot be disallowed or reversed even if a part of the inputs on which such credit is taken is used in the manufacture of final product, which is exempted from payment of duty un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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