9911796707
TMI Blog1997 (1) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,15,001.95 in his order. In his order dated 24-2-1989 disallowed the Modvat credit of Rs. 3,47,347.18. 2. The facts of the case are that the appellants are engaged in the manufacture of soap, glycerine, soap stock, fatty acids, hardened rice bran oil and stearic acid etc. The appellants are availing the Modvat credit of duty on inputs under the Modvat scheme and filed declaration from time to time under Rule 57G of the Central Excise Rules, 1944 mentioning thereunder various goods used as inputs in the manufacture of soap. The department found that many of these inputs declared in the declaration purported to be used as inputs for the manufacture of soap were not actually used in the manufacture of final product (soap). It was also noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed the Modvat credits to the extent stated above and the Collector (Appeals) confirmed the orders of the Assistant Colllector. 4. Sh. J.P. Kaushik, learned Advocate submits that the issue is a limited one in as much as caustic soda lye has been used both in the manufacture of soap as well as in the manufacture of soap stock; that activated carbon was used for purifying glycerine which is further used in the manufacture of soap; that dicamol filter aid was used for the purpose of filtering and this was used in relation to the manufacture of soap. The learned Counsel therefore submits that all the 3 inputs on which Modvat credit has been denied were used in or in relation to the manufacture of soap. 5. The learned Counsel submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal weight of soap stock obtained; that no evidence has been produced as to how the figure of 40% was arrived at. The learned Counsel submits that in fact 15% of the soap stock is caustic soda lye. He submits that the entire calculation of quantity of caustic soda lye has been arrived at after taking 40% which is erroneous and can be verified even today from the records of the appellants. The learned Counsel also submits that while confirming the demand on caustic soda lye the authority below failed to take into consideration the provisions of 57D(2) which provide that even inputs used in the manufacture of intermediate products which are exempt from duty, the Modvat credit on the same shall not be denied. He submits that admitted position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 products are no doubt used in or in relation to the manufacture of soap and thus they are inputs and we hold accordingly. 10. The only limited issue remains whether the duty taken as credit on the entire quantity of caustic soda lye should be disallowed. We find that this question has arisen because caustic soda lye is used in the manufacture of soap stock and soap is partly processed further for the manufacture of soap and partly cleared as soap stock under the exempted category. We find that Rule 57C of the Central Excise Rules provide that no credit of duty on the inputs under the Modvat Scheme shall be allowed if final product is exempt. The appellants contended that Rule 57D(2) provides that credit of duty on the inputs shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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