9911796707
TMI Blog2001 (8) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... find that Rule 57F specifically permits the despatch of inputs for processing. It also permits extension of time by the jurisdictional Assistant Collector in the event of delay in obtaining the goods. This rule or Rule 57-I contains no provision that Modvat credit will be liable to recovery if the inputs in question did not return to the manufacturer within the period of sixty days or during the extended period as permitted by the Assistant Collector. In the instant case, there is no dispute about the return of the goods. Therefore, recovery of Modvat credit ordered under the impugned order has to be held illegal. The appeal is accordingly allowed with consequential relief to the appellant and the impugned order is set aside." 3.The Refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of finished product in accordance with law for the reason that the inputs became unusable, lost, destroyed or were otherwise disposed of by the manufacturer." 4.Heard both sides. 5.We find that the Modvat Scheme under Rule 57A of the Central Excise Rules is a beneficial piece of legislation and benefit under the scheme has been made available to certain procedural requirements. Rule 57F of the Rules provides manner of utilisation of inputs and the credit allowed in respect of duty paid thereon. Rule 57F(4) of the Rules provides for removal of inputs outside the factory for further processing. The relevant portion of Rule 57F is reproduced below : "(1) The inputs on which credit has been taken may be used in or in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assistant Commissioner of Central Excise, the manufacturer shall recalculate the amount of actual credit attributable to such inputs or on inputs contained in the partially processed inputs and thereafter he shall adjust the differential amount, if any, after taking into account the amount already debited while sending the inputs or partially processed inputs from his factory." 6.While referring the issue to the Larger Bench, the referring bench was of the view that provisions of Rule 57-I(2) of the Rules are applicable in the case when the inputs removed outside the factory of the manufacturer for further processing, are not received back in the factory of the manufacturer. Rule 57-I(2) of the Rules reads as under : "Rule 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the reading of the relevant provisions of the Rules 57F and 57-I of the Rules, we find that provision of sub-rule (11) of Rule 57F of the Rules specifically provides the action to be taken in case inputs or partially processed inputs removed under Rule 57(4) are not received back in the factory of the manufacturer of the final product in the specified period. As the goods are to be removed from the factory of the manufacturer under Rule 57F(4), and if the goods were not received in the factory of manufacturer of final product action is to be taken in accordance with provisions of sub-rule (11) of Rule 57F of the Central Excise Rules. The issue referred to the Larger Bench is answered accordingly. 8.Now we take up the appeals for disposa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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