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TMI Blog2003 (10) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,95,576.80 (2) Claim for cut-tobacco contained in RG-1 (BSR stock) of cigarettes figure of cut-tobacco as per formula was calculated. Rs. 20,05,547.12 2.The appellants followed the required procedure contained in Rule 57H and submitted the required documents as demanded by the authorities from time to time. However, the Assistant Commissioner vide order dated 24-11-95 rejected the claim on the ground that original documents were not produced, the Assistant Commissioner did not take cognizance of the photocopies of the records supplied and also ignored the fact that the original RG-1 had been taken by DRI office, Baroda on 2-4-95. Aggrieved by the rejection order, special leave application was filed by the appellant before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be recovered and penalty under Rule 209 should not be imposed. 5.After exchange of certain correspondence between appellants and the Commissioner relating to permission to inspect documents etc. and after hearing the appellants, the Commissioner vide Order-in-Original No. 89/Demand/97, dated 19-11-97 ordered recovery of Modvat credit amounting to Rs. 59,01,123.92 and also demanded interest and imposed penalties. Thereafter the appellants came in appeal before the Tribunal vide Appeal No. E/740/98/NB. The Tribunal vide Final Order No. A/703/98/NB(DB), dated 14-8-98 [1999 (111) E.L.T. 893 (T)] remanded the matter to CCE, Vadodara holding that there was no suppression and also that the judgment of Hon'ble CEGAT in Collector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal had examined the applicability of the ratio of Tribunal's judgment in Sirpur case and arrived at a conclusive finding to the effect that the ratio of Sirpur Paper Mills case is not applicable to the facts of this case. 9.Notwithstanding the above position, we note that, Collector in his impugned order has held that the transitional credit was not admissible for the reason that (i) the appellants had taken credit under Notification No. 355/86-C.E., dated 24-6-86, whereas Rule 57H(1B) stipulates that, credit can be permitted only in cases where no credit has been taken by the manufacturer in respect of such inputs under any other rule or notification, (ii) Since one to one correlation was required, the duty paid on the cut-tobacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of duty paid on the inputs, the manufacturer is permitted to utilise the entire credit of duty paid on the consignment of inputs immediately after receipt of such inputs in the factory, notwithstanding the fact that the amount of input credit duty with reference to actual contents in the finished goods is much lower. We note that, Notification No. 355/86-C.E. requires strict determination of duty reduction on finished goods by ascertaining the duty paid on the actual quantity of inputs contained in the finished goods. Therefore, the findings of the ld. Commissioner that the taking of benefit under Notification No. 355/86-C.E., amounts to taking credit under any other rule or notification cannot be sustained. 11.Besides even for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es) cleared prior to 16-3-95. Under the set-off scheme, concessional duty on cigarettes was assessed by the officers present in the factory up to 16-3-95, after ensuring that the cut-tobacco from which the cigarettes were manufactured was duty paid. Once this position is accepted, change over to the Modvat credit procedure cannot require the manufacturer to produce a fresh set of evidence for duty payment. Therefore, the presumption that credit has been utilised for paying duty on cigarettes already cleared and there is no balance credit for permitting its transfer under Rule 57H is without any basis. 13.The next argument of the Commissioner is that duty paying documents to substantiate the credit amount have not been furnished, has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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