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TMI Blog1984 (8) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the appeal filed by M/s. Hindustan Wire Products (P) Ltd., against the order dated 20-4-1981 passed by the Assistant Collector of Central Excise, Patiala. 2. The facts of the case, in brief, are that M/s. Hindustan Wire Products (the respondents) are licensed for the manufacture of insulating varnish falling under Item 14 of the Central Excise Tariff which is used captively by them in the same factory for the manufacture of insulated electric wires. Notification No. 217/79-C.E., dated 30-6-1979 exempts varnishes falling under Item 14II(i) Central Excise Tariff, manufactured from ingredients on which the appropriate duty of excise, or the additional duty of customs, as the case may be, has already been paid and used for insulating ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Aggrieved with this order, Hindustan Wire Products pursued the matter in appeal. The Collector (Appeals) held that Hindustan Wire Products was entitled to the benefit of both the notifications. He held that Notification 201/79 was an exemption notification and that merely because a procedure was prescribed for its availment by way of proforma credit, the duty paid inputs would not become non-duty paid. In this view, he set aside the Assistant Collector s order. It is against this decision that the Collector of Central Excise, Chandigarh has come up in appeal before us. 3. The grounds put-forth in the appeal are - (a) The procedure set out in Notification 201/79 is on the lines of the rule 56A procedure for proforma credit and not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the inputs was taken they would cease to be duty-paid inputs and Notification 217/79 would not apply. 5. Opposing the appeal, Shri A.K.S. Bedi, Counsel for the respondent, vehemently submitted that the duty-paid inputs would continue to retain their duty-paid character even after credit of the inputs duty was taken. Notification 201/79 exempted all excisable goods in the manufacture of which duty-paid inputs were used, the extent of the exemption being the duty paid on the inputs. When the inputs left the factory of their manufacture, they were duty paid. The duty-paid character survived. Notification 217/79 was independent of Notification 201/79 and contained no clause debarring its benefit to assessees who avail themselves of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not an exemption scheme so-called and known. It envisages payment of duty at the full effective rate of duty applicable to the goods in question and permits availment of duty paid on the inputs towards discharging this duty liability. The procedure is somewhat on the lines of a ledger with credit entries for the inputs duty paid and debit entries for the duty payable on the finished product. Though the procedure in the appendix to Notification 201/79 is, in substance, the same as the Rule 56A procedure, the notification itself is truly and properly an exemption notification. We are inclined to agree with the counsel for the respondent that the duty-paid character of the inputs is not lost once the credit of the duty paid thereon is taken. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply to a manufacturer who avails of the Rule 56A procedure in respect of the duty paid on the base paper or, paper board. Another example is Notification 71/77, dated 28-4-1977. Yet another example is Notification No. 76/72, dated 17-3-1972. In the absence of a similar debarring provision to the effect that the benefit of Notification 217/79 shall not be available to a manufacturer availing himself of the inputs duty relief provided in Notification No. 201/79. We do not see how the benefit of this notification can be denied in the present case. 8 In the result, the appeal fails and is rejected. 9. [Order per : H.R. Syiem, Member]. - The department says that the raw material inputs like phenol, cresol, diacetone, butyl titanate etc. be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . is meant to take care only of clearances outside the factory of the input which is not used in manufacture of said goods. But, in my opinion, this paragraph is necessary, because in case of clearance of input, the said goods will lose that cut-off line which could have been provided by that input. 13. Notification 201/79-C.E., unlike Rule 56A proforma. credit procedure, requires an input-to-finished product correspondence as the language (of Notification 201/79-C.E,) explicitly stipulates. Only what is equivalent to the duty of excise already paid on the inputs is exempted. This assumes that the (input) duty is available and known for the calculation. When that duty is not available (as when credit has been taken), the exemption cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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