9911796707
TMI Blog1997 (1) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... lised by the appellants during the period May 1994 to February 95 under Rule 57U of Central Excise Rules (Appeal No. 975/95 Bom.). By the other order dated 14-5-1996 the Commissioner has similarly confirmed demand of Rs. 6,57,55,620/- for the period March 1995 to September 95 (Appeal No. 1408/96 Bom.). 2. The point at issue is whether duty credit on Capital goods permitted under Rule 57Q can be utilised for payment of duty only on those final product which have been manufactured out of such capital goods, or whether it can be utilised for payment of duty on any final product manufactured in the factory of manufacturer. 3. The relevant provisions in this regard are as follows : SECTION AAAA OF CENTRAL EXCISE RULES: CREDIT OF DUTY P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants declaration in this light of Rule 57S(2) before its amendment (which is relevant to this order) and found that they had specifically indicated the names of final product against each capital goods and hence concluded that credit can be utilised only for payment of duty on final product manufactured by using the declared Capital goods. The Commissioner further observed that the Capital goods for use in Acetic Acid and Hydrogen products had also not become operational for production work. Hence Commissioner ordered recovery of the Capital goods Modvat credit wrongly availed. 5. In the other adjudication order dated 14-5-1996, relating to the period after the amendment of Rule 57S(2), the Commissioner relied upon a Trade Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer and there is no dispute that appellants had included the other final products along with acetic acid in their declaration under Rule 57T. The further argument was that Rule 57S(2) is a specific provision which is clear on the point of utilisation of credit, and it should prevail over other provisions. In any case it was urged in these cases the entitlement to credit is not in dispute but only its utilisation. In this context it was submitted that since the Acetic Acid plant has since been commissioned and they have cleared it on payment of duty debiting PL account, the appellants will be entitled to use the credit in dispute for that purpose, and to that extent credit has to be restored in their RC 23C account simultaneously with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h machinery etc. also eligible for such credit, Rule 57Q setting out the facility has been extracted above. The question as to the scope of this provision is provided by some of the clarifications issued by the Central Board of Excise Customs and Trade Notice which are usually based on Board s clarification. These can be looked into and taken note of by the Tribunal as an aid to its interpretation being in the nature of contemporaneous expositio of the understanding of the provision by the authorities who have framed the Rules and are also to implement it. 8. It is noted that in a Board s Circular No. 88/88/94, dated 26-12-1994 it has been clarified that credit of the duty paid on capital goods is admissible only when such capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, but they have not been installed and taken up for production purposes, the conditions of basic Rule 57Q would not be satisfied and the assessee cannot claim credit of the duties paid on the capital goods received nor can he start utilising the same. The industry is, therefore, advised that credit of the duties paid on capital goods received in the factory should be taken only when such capital goods enter into production process and not soon after their mere receipt in the factory...." 10. A plain reading of Rule 57Q would indicate that it lays down the applicability of the scheme set out in the section i.e. Section AAAA of Central Excise Rules as a whole and the heading of that Section is credit of duty paid on capital goods used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion when the Acetic Acid plant had not gone into production at all. For the subsequent period also, until the user condition came to be fulfilled, the same result should follow. 11. However when once the acetic acid and hydrogen plant are installed and go on stream and when final products are cleared, the eligibility to credit and the entitlement to its utilisation would follow. In such circumstances the ratio of Tribunal decisions in the Mukesh Engg. - goods and in Ipitron Tiles (supra) would come into play for restoration of credit in Modvat account simultaneously against payment of duty by PLA debit of ineligible credit. The Bench in its Order No. 3036/96 WRB, dated 13-9-1996 modifying the earlier Stay order, has duly recognised this p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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