9911796707
TMI Blog2003 (7) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had correctly availed the credit of duty and discharged the duty liability on the final product, the demand confirmed and penalty imposed was set aside by the ld. Commissioner (Appeals), Trichy. 2. Aggrieved by this order, the Revenue has come in appeal on the ground that by Rule 96E, Cotton yarn is allowed to be removed without payment of duty for further processing and both Rules 56A and 57A allow credit of duty earned on inputs towards payment of duty on the final products. Therefore, the provisions of Rule 96E cannot be placed in juxtaposition to that of Rules 56A or 57A and the concurrent use of these procedures would be against the provisions of these Rules. Revenue has also contended that the respondents/assessee utilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the submissions made by both sides. The facts of the case are that the respondent/assessee are manufacturing sewing thread and availing the facility of the Proforma credit on cotton yarn in terms of Notification No. 7/94-C.E. (N.T.), dated 1-3-94 and subsequently changed over to the Modvat Scheme as per Notification No. 24/94-C.E. (N.T.), dated 20-5-94. The respondents were utilising cotton yarn in the manufacture of sewing thread and the cotton yarn was procured from the following sources :- (i) Duty paid yarn purchased from other factories; (ii) Non duty paid yarn received under Rule 96E from other factories and also from their sister concern. (iii) Yarn manufactured and captively consumed for the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Commissioner (Appeals) are reproduced below : I have gone through carefully the facts of the case, the grounds of appeal and the submissions made by the appellants during the course of personal hearing. The question to be decided in this appeal is whether credit of duty is admissible under Rule 56A or under Rule 57A of the Central Excise Rules, 1944 in respect of duty paid cotton yarn received in the factory, which was cleared for further processing/manufacturing of sewing thread to another factory or the premises of job worker and subsequently cleared without payment of duty under the provisions of Rule 96E but the duty on such sewing thread was ultimately paid by the assessee/warehouse owner under Rule 157 as modified by Rule 173N. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le as no duty has been paid on the final products at the time of removal from one factory or warehouse to another under the provisions of Rule 96E. The above view is not correct because the appellants had already produced AR3A applications duly countersigned by the officer in-charge of the warehouse certifying that the goods had been received and duly accounted for at the consignee s factory or warehouse. Once these goods are accounted for under the provisions of Rule 173N, the consignee/the owner of the warehouse will have to clear the said goods for home consumption on payment of duty under the provisions of Rule 157, as modified by Rule 173N of the Central Excise Rules, 1944. Therefore, under these situations, it cannot be held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods which are sent to their sister concern or to other units for manufacturing final product and clearing the same from the factory/warehouse ultimately cleared them after payment of duty. Since, the duty has been paid on the final products, neither Proforma credit nor Modvat credit can be denied to the appellants. It is on record that the appellants had already produced the AR3A applications duly countersigned by the officer in-charge of the warehouse and duly accounted for at the consignee s factory or ware house. Once these goods are accounted for under the provisions of Rule 173N, the Consignee or the owner of the warehouse will have to clear the said goods for home consumption on payment of duty under the provisions of Rule 157, as mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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