9911796707
TMI Blog2001 (2) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cleared by the appellants on payment of duty whereas the goods falling under Chapter 39 were cleared without payment of duty by availing exemption Notification No. 4/97. The dispute involved in the present appeal relates to the Modvat credit of duty of Rs. 70,018/- availed by the appellants in respect of capital goods against invoice dated 19-3-1997. The said Modvat credit has been denied to the appellants on the ground that the capital goods were being used by the appellants in respect of dutiable as also exempted goods and as such the same was not available under the amended provision of Rule 57R of Central Excise Rules, 1944. 3. After hearing both the sides, it is seen that sub-rule 1 of Rule 57R, before its amendment on 1-3-1997 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in respect of the capital goods when the word exclusively was not in Rule 57R(1), the Revenue entertained a view that as the appellants were also manufacturing exempted items with the capital goods, the Modvat credit will not be available to them irrespective of the fact that dutiable items were also being manufactured with the same capital goods. On the other hand the appellants contention is that the interim deleation of the word from Rule 57R(1) was only a drafting error which was subsequently rectified by re-insertion of the word exclusively . As such the subsequent amendment on 1-9-1997 was only clarificatory in nature and should be given retrospective effect from 1-3-1997. In support of their submissions they have drawn my atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise. The above view also gets support from the fact that table to Rule 57Q merely states that the capital goods must be used in the factory of the manufacturer and does not in specific terms say that user must be exclusively on the manufacture of finished excisable goods to which the scheme applies. Therefore even partial user of the capital goods for the manufacture of specified final product would suffice. As such if a manufacturer undertakes production of the specified finished excisable goods in the factory, the Modvat credit should not be denied on the ground that a partial use of the same capital goods is also in respect of the final product which are either not excisable or on which no duty has been paid. I also find force ..... X X X X Extracts X X X X X X X X Extracts X X X X
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