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TMI Blog2009 (9) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are cleared from the factory on or after 1st day of March 1994 and that no credit has been taken by the manufacturer in respect of inputs under any other rule or notification - while giving the declaration, the manufacturer has given particulars of the stocks lying at various stages though in law he was not required to furnish the same, It is in that context the authorities seem to think that sufficient evidence is not given to show the material, which was in process, and therefore, they have disallowed the claim - This approach has no legal basis and is not supported by the aforesaid provisions - matter is remitted back to the Original Authority - C.E.A. No. 6 of 2005 - - - Dated:- 3-9-2009 - N. Kumar and B. Sreenivase Gowda, JJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the extent of 11,59,536.47 kgs. during the year for which the duty paid gate passes are also shown. Against the said quantity credit was claimed only to the extent available on 4,03,525 kgs. of fibres which was in stock as on 21-3-1994. With reference to the aforesaid declaration, the Assistant Collector by its letter dated 15-4-1994 permitted the appellant to take modvat credit of Rs. 51,74,193.38 paise pertaining to the inputs held in stock as well as involved in finished products. 3. Thereafter, show cause notice dated 13-10-1994 was issued to the appellant proposing disallowance of modvat credit to the extent of 33,72,827.49 paisa out of Rs. 51,74,193.38 paisa on the ground that the appellant had claimed the duty erroneously with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed to the bank to whom the entire stock is hypothecated. Unfortunately, the authorities have not properly appreciated the matter and seem to think that the stocks are created for the purpose of case in the year 1999 when as a matter of fact the said documents were produced in the year 1994 itself and therefore, he contends the approach of the authorities in this regard is erroneous and requires interference. 5. Per contra, learned Counsel appearing for the respondent supported the impugned orders. 6. The two provisions which required to be noticed in order to adjudicate the dispute is Rule 57A as well as Rule 57H which reads as under :- Rule 57A. - Applicability - (1) The provisions of this section shall apply to such finished exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products, which are cleared from the factory on or after the 1st day of March, 1994, and that no credit has been taken by the manufacturer in respect of the inputs under any other rule or notification : Provided that no credit under this sub-rule shall be allowed in respect of inputs received, or declaration made under Rule 57G, on or after the 1st day of April, 1994 : Provided further that such inputs are not used in the manufacture of final product, which is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. 7. Rule 57A confers a right on the manufacturer the benefit of credit of the duty paid on the inputs while claiming the duty payable on the final products. Rule 57H is a transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable as on 1-3-1994, what is the duty paid on such credit and thereafter, what is the duty payable on the finished products and then give credit on the duty paid and giving benefit of credit whenever the finished products are sold by utilising such credit. The claimant producing proof to show the stock in the manufacturing process is not contemplated under the provisions. Under these circumstances, the orders passed by the authorities cannot be sustained. At the same time, the whole matter requires to be reconsidered in the light of the aforesaid provisions and the stand of the appellant s and the materials produced by them in support of their claims. In that view of the matter, we pass the following order : (1) The appeal is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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