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TMI Blog1999 (1) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... heme prescribed under chapter V.AAA of the Central Excise Rules. Rule 57K enables the Central Government to specify, the final products and the raw materials used in the manufacture of such final products, to which the provisions of this said chapter shall apply and also indicate rates at which such money credit can be given to such inputs in the manufacture of such final products. Notification 46/89 was passed by the Central Government in terms of the Rule 57K of the Central Excise Rules specifying inter alia that the vegetable oils, whether or not subject to one or more of the processes of hydrogenation or hydrolysis of the description in column 2 of the table mentioned in the said notification and such products are used in the manufacture of final products namely soap falling under sub-heading 3401.10 of the Schedule to the CETA. The rates have been provided under the table in the said notification. The notification also provides for certain conditions. A show cause notice dated 2-7-1992 was issued mentioning that the appellants were manufacturers of soap and also in para 4 thereof stated that in terms of Rule 57L of the Rules, the money credit of duty on the input used in the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acid i.e. hydrogenation to return back the resultant fatty acid to the supplier of the raw material namely VNE. Such processor can also utilise the resultant produce obtained by twice processing the raw material in the manufacture of final product namely soap. He emphasizes the fact that the raw material should be vegetable non-essential oil and the final product should be the soap. Hydrolysis or hydrogenation can be done either by the manufacturer of final produce or by a job worker. He also invited my attention to the trade notice issued by Aurangabad Collectorate, Trade Notice No. 47/87 for the proposition that the procedure prescribed under the trade notice has been fully complied with. The approach of the Collector (Appeals) according to Shri Ravindran, is absolutely wrong in law. He invited my attention to the decision of the Supreme Court in the case of The Tata Oil Co. Ltd. - 1989 (43) E.L.T. 183 especially para 6 thereof. 6. As against this, the ld. DR states that the Collector has rightly rejected the appeals of the appellant. He states that whatever fatty acid the appellant have obtained by processing the raw material twice, is not entitled to claim benefit under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of credit of Rs. 14,09,651/- from December, 1991 to June 1992 is recoverable from them." The case of the department is that the final product namely fatty acid is exempted. Therefore, WIPRO is not entitled to claim benefit of money credit. It is not so. The first para of the show cause notice admits that WIPRO is a manufacturer of soap. In the reply to the show cause notice in page 13 it has been specifically stated that the appellants were buying and using RBO in the manufacture of its own toilet soap, to which they were entitled to money credit. The Collector in the impugned order at para 6, 7 & 8 had held as under :- "The appellants are claiming money credit in respect of the process of oil which is neither provided under the Rules nor under the Notification No. 46/89. The notification specifies soap as final product and various vegetable oils as inputs. The notification provides that if all the processes are done in the same factory, the credit shall be taken on the quantity of vegetable oils received. Notification also further provides that in case where the processes of hydrogenation or hydrolysis are done outside the factory manufacturing soap, the credit shall be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty irrespective of the fact that instead of RG 1, a separate account has been prescribed. Further again the contract refers to the excise duty. It is mentioned in para 10 of the Contract that (a) No excise duty is currently payable on hydrogenated VNE oils (inedible goods) and fatty acids. (b) Should there be any change in excise tariff or in the effective rate of duty, the same shall have to be discussed and agreed upon with us before filing excise classification or paying duty to the concerned authorities." The argument of Shri Ravindran is very correct according to me. When we see the Notification 46/89 is says inter alia that the inputs namely vegetable oils whether or not subject to any one or more processes of hydrogenation or hydrolysis of the description in column 2 of the table annexed in the notification and used in the manufacture of final product namely soaps. It is nobody case that WIPRO was not using the product processed by them, which is captively consumed by them for the final product namely soap. The show cause notice has stated that they have utilised it since the fatty acid is exempted from 12/89. Here it is admitted that the final product is soap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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