9911796707
TMI Blog2004 (11) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ocoa 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 Cadbury brand biscuits manufactured by it on job work basis. 3. A show cause notice was issued by the concerned authority for recovery of duty on goods bearing "Ramesh" brand. The Assistant Collector dropped the demand holding that an assessee can avail full exemption on products falling under one heading and avail Modvat credit on full duty on goods falling under different chapter heading. Being aggrieved by suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 by the CEGAT on Kharia Cement Works case (supra) was more appropriate and also in consonance and department's own understanding. It was held that in terms of Notification 175/86, exemption would not be available under the said notification to a manufacturer for certain specified goods manufactured by him, if he chooses to avail of Modvat credit for certain other specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks 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 manufacturer who avails of Modvat credit under Rule 57A on inputs and for other manufacturers who do not opt for the Modvat Scheme. In coming to this conclusion, it may also be borne in mind that the input duty relief given in Modvat Scheme is an option given to the manufacturers who have to take a conscious decision to avail of it and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 would apply. Keeping in view the further fact that there is no one to one correlation between the inputs and final products under Modvat Scheme it would not be possible to allow the manufacturer to simultaneously avail of Modvat for some of the products and avail of full exemption to others under the small scale exemption scheme. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt 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 avail full exemption for others under small-scale exemption scheme. 11. The view expressed in Kamani Foods' case (supra) is irreversible and projects a correct analysis of the relevant aspects. We affirm the view. Contrary view taken in Faridabad Tools' case (supra) is not correct. 12.The appeal̳ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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