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TMI Blog1999 (12) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... dure, taking credit of the duty paid on the inputs and utilising such credit towards payment of duty on the finished product in or in relation to the manufacture of which those inputs were utilised. The dispute in this appeal relates to the extent to which the appellant could avail of the credit of the duty paid on fuel oil used by it to produce steam, which was used in the factory either in or in relation to the manufacture of dutiable finished product or for products exempted from duty or for other purposes. The period in question is from May 1995 to June 1996. 2. The dispute arose consequent upon two amendments to the Modvat rules. The first amendment made on 16-3-1995, Rule 57A was amended to include, in the Explanation (i), which def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this was therefore not an issue. It took the stand with regard to the rest of the oil that it was entitled to take credit in view of the amendments made to the rules which we have referred to above. Adjudicating on the notices issued for clearance during the period October, 1995 to June 1996, the Deputy Collector did not agree and confirmed the proposals for recovery of duty made in the notices and also imposed a penalty. His order has been confirmed by the Collector (Appeals) which is impugned before us in the Appeals 2289/97, 2316/97 and 2317/97. Appeal 774/97 is against the order of the Commissioner confirming the notice on the same ground for the remaining period. 5. Advocate for the appellant contends that the credit is available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now settled law that an excisable product manufactured in a factory in which it is used for manufacture of another product would be an intermediate product, notwithstanding that some part of this first product is cleared on payment of duty. That is to say, that portion of the first product which is used in the manufacture of any other product would be an intermediate product with reference to the manufacturer, whereas the remaining part which is cleared for home consumption would be a final product. 8. The Departmental Representative raised a contention that sub-rule (2) of Rule 57D refers to any intermediate product which come into existence in the course of manufacture of the finished product. The use of these words, he says limits its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is proviso. 11. In that case, it is difficult to see what the object of amending the rule was. As we have discussed in the preceding paragraph, even before this amendment credit of duty paid on furnace oil would by virtue of amendment of Rule 57A in March, 1995 which included fuel within the definition of inputs, be available if they were used to manufacture steam in the manufacture of excisable final product. This position will hold true, notwithstanding that the steam itself is exempted from duty. Rule 57D(2) provides credit to be used in such situations where the steam is an intermediate product. We have earlier held that the steam has to be considered to be an intermediate product. 12. What then is the meaning of the term for any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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