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TMI Blog1997 (6) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants has pleaded that the appellants are utilising duty paid molasses in the manufacture of Ethyl Alcohol the notified input under money credit scheme and utilised this Ethyl Alcohol for the manufacture of Acetic Anhydride. He has pleaded this Acetic Anhydride is not notified finished product under Notification 231/87. He has pleaded that this Acetic Anhydride was mostly cleared outside the factory on payment of duty and a small portion of the same was being captively consumed for manufacture of Asprin. It was also a dutiable item but the same was not notified under Notification 231/87. He has pleaded that the appellants had been filing and maintaining all the records in regard to the inputs namely Molasses received by them, the Acetic Anhydride manufactured by use of Ethyl Alcohol as also the Aspirin which was finally cleared on payment of duty. The necessary RT 12 returns were also filed in respect of each of the manufactured products manufactured by them and all the information was given in the documents both as regards the quantum which was cleared outside the factory and the quantum which was captively consumed. He has pleaded that the appellants had the option either t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the outset, the appellants in that case would have opted for the Modvat Credit which was available for the use of Molasses in or in relation to the manufacture of Asprin manufactured by them out of Acetic Anhydride which was captively consumed without payment of duty. He has pleaded that the appellants were prevented from staking this claim as they felt that the Department is giving them the full benefit which they expected to get by reason of the use of Molasses which had been brought in as input. He has pleaded since the Department has chosen to change its position in regard to the availability of Money credit in respect of Ethyl Alcohol which was captively consumed for Acetic Anhydride which did not suffer duty and the appellants should not be denied the benefit of Modvat credit which otherwise would have been available in case the Department at the outset had chosen to deny this benefit of Money credit as has been denied now. He has pleaded even otherwise the Money credit could not have been denied to them as in terms of Rule 57L the credit is not available where the notified finished product is exempt or suffers no duty. He has pleaded that Notification 217/87 although is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h had been utilised through manufacture of Ethyl Alcohol and Acetic Anhydride for the manufacture of Aspirin in the appellants factory and which they did not claim earlier as the money credit had been allowed for the entire quantum of Ethyl Alcohol which were manufactured out of Molasses. 5. In regard to the first point, I observe that both Modvat Scheme and Money Credit Scheme envisage benefit to be given where the notified finished product suffers duty. In the present case admittedly the portion of Acetic Anhydride which was manufactured out of Ethyl Alocohol in respect of which money credit was taken, did not suffer duty for reason of Notification No. 217/87. The objective and reasons for which the Notification 217/87 was issued would be that where Modvat credit was taken the same should not be denied just because an intermediate product emerged in the course of the manufacture of the notified finished product. But the fact remains that the intermediate product which is exempted by Notification 217/87 was not to suffer any duty by reason of that this become exempted goods. Once the goods are exempted the provisions of Rule 57L come into play. In the above view of the matter I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was captively consumed without payment of duty. The appellants were therefore rightly denied as held above the benefit of money credit. Since, however, this change took place on a subsequent date and the Department itself had approved the appellants taking of the money credit on the full quantity of Ethyl Alcohol, the appellants therefore could not have simultaneously made a claim for Modvat credit in respect of the Molasses which came to be used in or in relation to the manufacture of Aspirin through the route of Ethyl Alcohol for which the money credit has now been denied. The plea of the appellants is that they in fact in the initial stages filed declarations both for Modvat purposes under Rule 57G as well as for Money credit purposes under Rule 57(O). They however did not proceed to take acknowledgment for the declaration under Rule 57G as they had been allowed the full benefit of Money credit for the entire quantity of Ethyl Alcohol as above. In these circumstances therefore the question to be examined is whether the appellants can be denied the benefit of Modvat credit. I observe that the appellants on account of the acceptance of their plea to give them full credit of money ..... X X X X Extracts X X X X X X X X Extracts X X X X
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