9911796707
TMI Blog2001 (7) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... me is that the inputs sent under 57F(3) challans were received back after the assembly of different new products as stated which are further used in the manufacture of an excisable final product, and that since the duty was paid on a different final product, their availment of Modvat credit is in order. The appellants have also cited CEGAT SRB decision vide their order No. 292/1995 dated 4-5-1995 in Appeal No. E/428/94 in the case of Collector of Central Excise, Madras v. M/s. Lucas TVS Limited - 1995 (78) E.L.T. 709 (T). The appellant have also pointed out that the procedure now followed is as per the Department s instructions and in any case no loss of revenue is involved since, the job worker would have availed credit, had the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re against the Rule 57F(1) (ii) i.e. removal of inputs as such on payment of duty - earlier followed by the appellant. 8. In the light of the above discussions, I allow both the appeals. In the grounds of appeal, the Revenue contends that the assessee cannot take Modvat credit on the duty paid by the job workers. They have distinguished the CEGAT decision rendered in the case of CCE v. Lucas TVS Ltd. reported in 1995 (78) E.L.T. 709 (T). It is stated that the assessee had availed Modvat credit twice i.e. initially on the receipt of the inputs and brought back into the factory after using it in the manufacture of final product by the job workers and cleared the same on payment of duty which is against the provision of law. The ld. DR re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and gone through the records. We notice that the assessee had cleared the goods by following the procedures under Rule 57F(3) and the job worker after assembling the inputs into components and had paid the duty and returned the same to the assessee. The assessee utilised the intermediary product while manufacturing the final product after taking the Modvat credit on the duty paid by the job worker. The procedure followed by the assessee is in keeping with the provisions of the law and Commissioner has rightly followed the decision of the Tribunal in the case CCE v. Lucas TVS Ltd. (supra). The findings recorded by the Tribunal in para 5 is reproduced below. 5. I observe that as brought out in the facts recorded above, the inserts have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for export on payment of appropriate duty of excise or for export under bond, as if such inputs have been manufactured in the said factory : Provided that where the inputs are removed from the factory for home consumption on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such inputs under Rule 57A. (2) Notwithstanding anything contained in sub-rule (1), a manufacturer may, with the permission of the Collector of Central Excise and subject to such terms and conditions and limitations as he may impose, remove the inputs as such, or after the inputs have been partially processed during the course of manufacture of final products, to a place outside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by Rule 57F(2). It is open to the Revenue to initiate action under the law in the light of the above observation so far as the removal of inserts without payment of duty under Rule 57F(2) is concerned. So far as the finding of the lower appellate authority that the respondents are entitled to Modvat Credit is concerned, I find no infirmity in the order. The distributor covers received have suffered duty and have been received by the respondents under necessary gate pass evidencing payment of duty. The benefit of any variation of the duty has also to be given to them. The incorrect availment of the benefit of Rule 57F(2) in case of removal of inserts cannot debar the respondents from the benefit of Modvat credit of duty paid on the di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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