9911796707
TMI Blog1997 (4) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... dvat credit of Rs. 1,77,794.00 for such material. This was objected to by the department on the ground that only part of the inputs goes into the final product. Show cause notice was issued to the appellant for disallowance of the credit taken by them and recovery thereof under Rule 57-I. The appellant replied to the notice contesting the allegation therein. The plea was not accepted by the Deputy Collector, Faridabad who passed her order dated 24-2-1995 confirming the demand. Their appeal against the said order before the Collector (Appeals), New Delhi being unsuccessful, the present appeal has been filed. 2. Shri G.S. Agarwal, learned Counsel for the appellants submitted that the lower authorities fell in error in holding that as pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that apportionment of credit was not permissible as part of the input his not capable of being used in or in relation to the manufacture of final product and that there was no option but to deny the credit on the whole of the material. Learned counsel submitted that in the cases cited, namely Varuna Sulphonators Pvt. Ltd. v. Union of India - 1993 (68) E.L.T. 42 (Allahabad High Court) and Detergents India Ltd. v. Collector of Central Excise, Hyderabad - 1992 (61) E.L.T. 310 = 1992 (41) ECR 580 (Tribunal) though part of the quantity of the input material was contained in the by product Modvat credit was held to be admissible for the entire quantity of input material taken into use. 3. The arguments were resisted by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department would have been justified in objecting to the credit taken or perhaps more appropriately to excess credit taken if they had declared aluminium wire and scrap for which credit is admissible with reference to its weight but actually taken the credit on the basis of the weight of waste and scrap including the non-aluminium portion in the form of PVC, inflating the weight of the input material beyond the declared and entitled aluminium metal. In the present case, as stated earlier, the Modvat declaration was not of aluminium waste and scrap but of insulated cable and cable scrap and Modvat credit was taken of the duty paid thereon by the manufacturer-supplier of the scrap. It was not taken with reference to the weight of the metal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of manufacture of the final product, some waste had arisen. 5. In the two cases cited by the learned counsel, the entire quantity of the input material was taken into use. Part of it was used up in the manufacture of the final product and part of it made up a by product, spent acid. It was held that credit cannot be restricted to the quantity of inputs referable to the final product manufactured. As held by me above, the input material in the present case has to be treated as used in a continuos manufacturing operation and not compartmentalised into melting the cable waste to remove the PVC portion and then carrying out the manufacturing process with added metals and alloys for obtaining the final product. In that view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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