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TMI Blog2015 (10) TMI 2616X X X X Extracts X X X X X X X X Extracts X X X X ..... 175/86, dated 1-3-1986 and paying duty at concessional rate as applicable under this notification. During 2002-03, they submitted a fresh classification list 2/92-93 effective from 21-9-1992 claiming benefit of Notification No. 116/90, dated 16-6-1990. In terms of this notification, the product is chargeable to Nil rate of duty on fulfilment of conditions, inter alia, that such PVC Insulated Winding Wires are made from bars, billets, rods or wires of maximum cross-section dimension exceeding 6mm on which duty of excise has been paid at the rate of not less than Rs. 16,200 per Ton and no duty credit thereof has been taken under Rule 57A of the Central Excise Rules. Scrutiny of records revealed that the appellant had purchased copper wires o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 2-1-1991 which clarified that, if for the purpose of exemption the input is specified as billet, it cannot be held that exemption would not be available if the input is a wire rod, which is obtained from billets. He also relies on Board Circular No. 93/13/87-CX.3, dated 25-6-1987, which clarified that so long as duty paid bare films which have gone into the manufacture of such lacquered/ laminated/metallised can be proved to have been manufactured out of duty paid plastic material, such lacquered films can also be said to have been manufactured from duty paid plastic material. He relied on the Hon'ble Supreme Court judgment in the case of Tata Oil Mills Co. Ltd. v. CCE - 1989 (43) E.L.T. 183 (S.C.). In this judgment, it was held that so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er states that it is not a question of manufacturing wire out of wire. The issue here is that the PVC winding wire is a final product, which is exempted only if the input wire exceeds 6 mm cross-dimensional area. Therefore, there is a clear violation of the notification. He also submitted that neither the classification list nor the Form-IV register, nor the RT-12 returns mentioned that they were using wire of cross-dimension less than 6 mm. The approval of classification indicating eligibility of Notification No. 116/90 is obviously pre-supposes observation of conditions of the notification. 4. Heard both sides and considered the submissions. 4.1 Taking the first contention of the learned Counsel for the appellant, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .), was different as the issue under consideration was winding of wires in the repair of coils of electrical transformers; thus the facts were different. Therefore, the first contention of the appellant is rejected. 4.2 The second contention is that even if the wire of cross-dimensional section exceeding 6 mm was not in their hands, it does not mean that the same was not the source of the material out of which PVC wire were made. We find from a plain reading of the notification that the exemption on manufacture of PVC Insulated Winding Wire was available only if the input was wire of maximum cross dimensional area exceeding 6 mm of copper. We do not find under the notification any reference to the fact that PVC Winding wire should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made from a billet which was explicitly included as an input for the benefit of the notification. 4.3 On the issue of time bar, we would agree with the findings of the Commissioner that once the notification benefit is claimed in the classification which is approved by the Central Excise authorities, it goes without saying that the conditions of the notification have to be satisfied. It is not possible for Revenue to know beforehand that the condition will not be satisfied. The decision of the Hon'ble Supreme Court in the case of Dabur India Ltd. (supra) is based on the fact that the extended period of limitation would not apply when the classification list has been duly approved. In the present case approval was given for benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered by the Hon'ble High Court. 4.4 The last plea of the learned Counsel is that the benefit of Modvat credit on the inputs should be given in case the benefit of exemption is denied. We agree with this contention because had they not availed the benefit of Nil rate of duty under the exemption, Modvat credit on the inputs would have been available. Therefore, we allow the benefit of the Modvat credit on the inputs subject to verification by the jurisdictional Assistant Commissioner. 5. Having held that there was mis-statement of facts, the mandatory penalty under Section 11AC is imposable. However, as we have allowed the benefit of Modvat credit, the mandatory penalty under Section 11AC shall be the amount of duty demande ..... X X X X Extracts X X X X X X X X Extracts X X X X
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