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TMI Blog2001 (3) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of Notification 71/68, dated 1-4-1968. The benefit of the notification is subject to the provision that Modvat credit should not have been availed on the inputs contained in the manufacture of the goods. The show cause notice, dated 10-9-1990, for the period 1-3-1986 to 31-5-1990, was therefore issued. The Collector confirmed the demand. As he found there was no provision for the reversal of Modvat once credit was taken. 2. This was prior to the decision of the Supreme Court in the case of Chandrapur Magnet Wires Pvt. Ltd., 1996 (81) E.L.T. 3 (S.C.). Therefore, the Tribunal set aside the order and allowed the appeal vide its Order No. 1087/76, (sic) dated 25-6-1996, to redetermine the penalty, after taking into consideration a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was emerging from the mixing machines of natural rubber, synthetic rubber, china clay, sulphur, etc. were irregular shaped sheets of compounded rubber, which he found to be not covered a sheets but as primary rubber and thereafter on a comparative study of two notifications concluded that Notification No. 71/86 did not exempt compounded rubber in the form of irregular sheets from payment of duty as according to him it covered only sheets and also he found only Notification No. 371/86 prescribed a concessional rate of duty on such goods. He also found that Notification No. 68/86, dated 10-2-1986 exempted parts of stationary batteries. Stationary batteries and containers in the form of plates x sheets were concluded by him to be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rubber used, in the course of manufacture of batteries. (b) We find that the Tariff Heading 40.05 reads as - 40.05.00 compounded rubber, unvulcanised, in primary forms or in plates, sheets or strip. Therefore, so long as the entity is compounded rubber and is unvulcanised, in any form i.e. primary, plates, sheets or strips it would be classified under 40.05. Primary form , as per Chapter Note 2 to Chapter 40 prescribes, that the expression, applies only to liquids and paste, blocks of irregular shapes, lamps, bulbs, powders, granules, combs and similar bulk forms. It therefore does not cover irregular sheets of compounded rubber which are emerging from the mixture machines and then used, cut to size or wrapped for vulcanisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the expression sheets under Heading 40.05, it would therefore be covered by the benefit of Notification No. 71/68 subject to reversal of Modvat credit availed, as held by the Tribunal in the Remand Order No. 1087/96, dated 25-6-1996. The denial of the same by the Adjudicator is therefore not upheld. The finding of the Adjudicator that irregular shaped compounded rubber sheets are not intermediates, as such and parts of stationary battery is not upheld. The downward integration, cannot be limited to only the penultimate part i.e. hardened sheet/containers, but would also apply to the prior stage and would cover unvulcanised rubber. We therefore, find no reason in the order to sustain exigibility, and even if held exigible, the disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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