9911796707
TMI Blog2001 (2) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... not been specified as an input or final product under Notification issued under Rule 57A. However, the Commissioner (Appeals) disagreed with him in the light of the judgment noted and the reasoning recorded in para 3 of his order which is reproduced below : "I have gone through carefully the facts of the case and the submissions made by the appellant. The issue involved in this appeal is as to whether credit of duty is admissible on polyester staple fibre which was used in the manufacture of polyester/cotton blended yarn during the manufacture of which carded/combed cotton merged as an intermediate product. The lower authority has held that carded/combed cotton is not specified as an input or as a final product under a Notification issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketable or not. It is contended that the AC had made this point amply clear in his earlier Order No. 74/95, dated 16-3-1995 that the during manufacture, polyester 67% and cotton 33% blended yarn, no intermediate product falling under Heading 52.02 emerges since polyester fibre was pre-dominant. It is contended that the order of the Commissioner (Appeals) is not in keeping with the CEGAT's direction in the remand proceedings. It is contended that Modvat credit cannot be extended to Polyester/staple fibre which was used in the manufacture of polyester/cotton/blended yarn for the various reasons made out in the appeal memo. 3. The learned SDR strenuously argues and seeks restoration of the Order-in-Original on the basis of the grounds rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B sets out that in respect of inputs purchased from small scale units, credit shall be allowed at the rate that was applicable to such inputs. Therefore, Rules 57A and 57B are the rules relating to allowing of credit. On the other hand, Rule 57C says that no credit of duty paid on inputs shall be allowed when the final product is exempt .......". Thus Rule 57C is a Rule relating to non-allowing of credit. However, Rule 57D(2) does not refer to credit being allowed or not allowed but uses the expression "credit shall not denied or varied". To our minds, Rule 57D(2) does not set out the condition precedent for extending Modvat credit to an assessee. Non-fulfilment of condition of Rule 57D(2) cannot result in disentitlement of an assessee to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not denied in the circumstances mentioned in the sub-rule." [paras 8, 9] 4. He submits that the above ratio applies to the facts of the present case and hence the Revenue appeal is required to be rejected. 5. On consideration of the submissions and on perusal of the Commissioner (Appeals)' order vis-a-vis the Larger Bench judgment in the case of Ballarpur Industries (supra), paras 8 & 9 of which have been extracted above, I am of the considered opinion that the Commissioner (Appeals) was right in allowing the Modvat Credit. The Larger Bench judgment clearly lays down the law that merely because intermediate product emerges, that by itself will not be a ground to deny the benefit of Modvat credit unless the final product is exempted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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