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TMI Blog2004 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... Arijit Pasayat, J.]. - Heard Mr. Mohan Parasaran, learned Additional Solicitor General. There is no appearance on behalf of respondent (hereinafter referred to as the assessee). 2. Factual background in a nutshell is as follows :- The assessee was engaged in the manufacture of biscuits under the brand name of "Ramesh" on his own account and under the brand name of "Cadbury" on job work basis on behalf of M/s. Hindustan Cocoa Products, Bombay. Own products worth approximately Rs. 6.29 lakhs was cleared. In addition, there was clearance of goods worth Rs. 1,20,937/- availing the benefit of Notification 175/86, dated 1-3-1986. Simultaneously, assessee filed an application on 17-1-1990 for availing Modvat benefit in respect of Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to by learned Additional Solicitor General, we find the contention to be correct. In para 2 of the judgment of the Larger Bench reference was made to Faridabad Tools case (supra). The decision in that case was at variance with another decision of a Special Bench of CEGAT in Kharia Cement, Works v. Collector of Central Excise, 1989 (42) E.L.T. 696 (Tribunal). Considering the rival submissions as to the acceptability of the decisions which were divergent in their conclusions, the Larger Bench in Kamani Foods case (supra) held that the decision in Kharia Cement Works case (supra) was not brought to the notice of the Special Bench when it decided Faridabad Tools Pvt. Ltd. (supra). It was held that the interpretation put on the notification b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) it was inter alia observed as follows :- "On the other hand, the ruling given by the Special Bench in the case of Kharia Cement Works, already extracted (supra), is on the reasoning that Notification has to be read as a whole and sub-clauses (i) (ii) have to be construed harmoniously. The decision in the Kharia Cement Works case is a more reasonable interpretation of the Notification for the reason that the exemption in the Notification envisaged for the specified goods accrues to them through the instrumentality of the manufacturer. The Notification clearly recognised two categories of manufacturers - those who avail of Modvat credit and those who do not. The level of exemption is clearly fixed at different levels for the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ministry of Finance, CBEC, as contained in Board's F. No. 216/5/86-CX, dated 1-7-1986; F. No. 22/46/1986-TRU, dated 8-9-1986 and Circular No. 9/93, dated 24-8-1993 in which the earlier instructions were reiterated. These instructions have been incorporated in Trade Notices issued by the various Collectorate of Central Excise, e.g. Delhi Collectorate T.N. No. 62/86 at 1986 (26) E.L.T. (T21). The clarifications are to the efct that the scheme of exemption under Notification 175/86 provides for an integrated method, of computation of value of clearance. As per the notification, if a manufacturer avails of Modvat relief in respect of specified goods covered under the Notification, then the concessional rate of normal duty less 10 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The notification clearly demarcated the two categories of manufacturers. A clear cut distinction is explicit between a manufacturer availing Modvat credit under Rule 57A and another not opting for the Modvat Scheme. As is statutorily provided, input duty relief is given under the scheme to the manufacturers who opt to operate under the scheme by applying for it in the prescribed manner. Ultimately the manufacturers have the choice of choosing one of the two concessions, i.e. either The Modvat Scheme or Notification 175/86. Further, there is no one to one correlation between the inputs and final products under Modvat Scheme. It would therefore not possible to allow the manufacturer to simultaneously avail Modvat for some products and ava ..... X X X X Extracts X X X X X X X X Extracts X X X X
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