9911796707
TMI Blog2002 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioners, inter alia, manufacture aluminium collapsible tubes classifiable under Chapter Sub-Heading No. 8512.11 of Central Excise Tariff Act, 1985. Under the Finance Act, 1986, the provisions of Rule 57A to Rule 57J were introduced by way of amendment to the said Rules (popularly described as 'Modvat Rules'). Under the Modvat scheme while making payment of excise duty on finished goods, the duty on the raw materials used by the manufacturers are adjusted or in other words, if any duty is paid on the materials used in the manufacturing process, in that event, while making payment of excise duty, on the end-product, the duty which is already paid in respect of those materials are deducted. 3.The petitioners opted for Modvat scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on record whether or not the request made by the petitioners was accepted by the Excise Department. However, it appears that two show cause-cum-demand notices dated 28-10-1986 and 23-3-1987 came to be issued which required the petitioners to show cause as to why central excise duty in the sum of Rs. 77,977.96 and Rs. 66,041.64 should not be recovered from them under Section 11A of the Act. Reasons stated in both the notices are identical. The said reasons read as under : "M/s. Klin-O-Pack are manufacturer of Aluminium Collapsible tubes classifiable under Chapter No. 8312.11 and had opted for Modvat on 21-3-1986 and availed the Modvat facilities from 1-4-1986 to 13-4-1986 and thereafter withdrew themselves from Modvat. As per the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven thereafter for some time. Therefore, the Government's intention has never been to issue a notification as well as to forbid those assessee who were under the Modvat from taking benefit of the same. (d) If the notification is issued and the assessee is entitled to it the excise authorities cannot deny that on the basis of Ministry's letter without any specific provision for such denial. 6.The Assistant Collector Central Excise, Division VII, Bombay II, after hearing the petitioners rejected their contentions and held that the trade notices on the subject did not permit such change over during the same financial year, as such it was not permissible to permit the petitioners to opt out Modvat Scheme once having exercised an opti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the respondents. He submitted that the scheme of exemption under Notification No. 175/1986, dated 1st March, 1986 provided for an integrated method of computation of value of clearance made in a financial year. As per the notification, if a manufacturer avails of Modvat relief in respect of the specified goods, the concessional duty (normal duty less 10% Adv.) would be applicable. Keeping in view this position and the fact that there is no one to one correlation between the inputs and final products under Modvat Scheme, it is not possible to permit a manufacturer to opt out of Modvat Scheme when the option to avail benefits of Modvat Scheme is exercised at the beginning of the financial year in respect of the specified goods. It can only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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