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TMI Blog2002 (12) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs under Rule 57A, that Metallic frame up to 1-6-98 and powered sun-glasses were chargeable to nil rate of duty that the Dy. Commissioner under the Adjudication Order confirmed the demand in terms of Rule 57CC as the Respondents were manufacturing both the dutiable as well as products chargeable to nil rate of duty; that however, the Commissioner (Appeals), under the impugned Order, has allowed the appeals holding that once the Respondents have paid the duty on intermediate product namely, piece parts, the Modvat credit on inputs used in their making was definitely admissible irrespective of the fact that that the final finished goods were cleared without payment of duty. The learned D.R. further, submitted that the final products manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty free goods. 3. On the other hand Shri A.R. Madhav Rao, learned Advocate, submitted that the Respondents manufacture sun-glasses which are dutiable metal frames which were exempted prior to 1-6-98 and powered sun-glasses which are charged to nil rate of duty; that for the manufacture of these products they produce various parts in their factories out of various duty paid items in respect of which they avail Modvat credit; that the parts which are used in the manufacture of sun-glasses are cleared without payment of duty availing the exemption under notification No. 67/95-CE; that the parts for manufacture of metallic frames and powered sun-glasses are captively removed on payment of Central Excise duty; that Rule 57CC is applicable to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of final products which are exempted from payment of duty. The Department, it appears to us, is of the view that the Modvat credit will be available only if metallic frame and powered sun-glasses will be chargeable to duty. We find ourselves unable to agree with this view. Any product which is manufactured out of the inputs and suffers the duty may be an intermediary as it is being used further in the manufacture of some other product captively but for the purpose of Central Excise duty, it is levied and collected on a final product. It is not the case of the Department that no duty is chargeable on the parts manufactured captively used in the manufacture of exempted products. Once the parts have suffered the duty it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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