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TMI Blog2016 (1) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules, 1944 read with Notification No.177/86-CE. The finished goods i.e. explosive manufacture by the appellant are removed from the factory under Notification No.191/87 without payment of Central Excise duty. Since the final product removed from the factory by availing the exemption contained in Notification 191/87, the Department initiated show cause proceedings for recovery of the Modvat Credit taken on the inputs in terms of Rule 57 I read with section 11A of the Central Excise Rule 1944. The Show Cause Notice issued in this regard was adjudicated vide Order-in-Original dated 21.01.2004, in dropping the proposals made therein. On Appeal filed by the Revenue, the ld. Commissioner (Appeals) vide the impugned order dated 03.06.2005 has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of final product, which are exempted from whole of duty of excise leviable thereon or are chargeable to nil rate of duty. In the present case, explosives removed from the factory under chapter X Procedure is exempted from the whole of duty of excise leviable in terms of Notification No.191/87 dated 04.08.1987. Since the said Notification exempts explosives from payment of duty, in our opinion, the embargo created in Rule 57C of the Central Excise Rules, 1944 will be applicable in the present case, and thus, Modvat credit on the inputs used in the manufacture of the said exempted product is not available to the manufacturer. We find that in an identical case, this Tribunal in the case of Navbharat Explosive (Supra) has held that expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decision in the case of Alpha Drugs, relied upon by the Appellants, is not applicable to the present matter inasmuch as the goods were removed in the said decision without payment of duty under bond in terms of Notification 49/94-C.E. (N.T.), dated 22-9-1994 issued under Rule 13 of the Central Excise Rules, 1944. Rule 13 relates to export of goods under bond which are neither exempted from payment of whole of the duty leviable thereon or are chargeable to nil rate of duty. In such a situation the provisions of Rule 57C are not attracted. The Punjab & Haryana High Court has, therefore, held that without payment of duty is not the same thing as goods wholly exempt or goods chargeable at nil rate of duty, therefore, the provisions of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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