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TMI Blog2005 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit attributable to the inputs lying in stock, inputs contained in finished/semi-finished goods in accordance with Rule 57AG of Central Excise Rules. The revenue proceeded against them on the ground that they had not reversed the Modvat credit attributable to the inputs contained in the waste. The original adjudicating authority held that the appellants were not required to reverse the Modvat credit contained in the waste. His reasoning is as follows: "From the records of the above case, I observe that during the financial year 99-00 the assessee was paying duty at the concessional rate as stipulated under Notification No. 5/99, dated 28-2-1999 and were availing of modvat credit of duty paid on inputs. For the financial year 2000-01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly examined the case records and the rivals submissions made. As per the records, vulcanized waste was cleared on payment of duty till 31-3-2000 under heading No 44.04. No reversal of modvat also was involved till then. Once the respondent opt out of modvat with effect from 1-4-2000 to avail Notification No. 8/2000, they are to reverse the credit on the finished goods lying in stock, inputs etc. In the instant case by their own action and conduct, the respondents themselves have accepted the dutiability of the vulcanized waste till 31-3-2000. Admittedly they were clearing the same on payment of duty and thus the applicability of rule 57D for the eligibility of modvat also did not arise. Hence just because they have opted out of modvat schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in stock as waste and scrap arising in the case of manufacture of metal containers when assessee opts for exemption under Notification 7/97. Learned SDR reiterated the points in the Order of the Commissioner (Appeals). 5. We have gone through the rival submissions carefully. Rule 57D was in force till 31-3-2000. Modvat credit taken on the inputs could not be denied or varied on the ground that some part of the input is contained in the waste irrespective of the fact whether the waste is dutiable or not. When the appellant opted out of the Modvat scheme, they were required only to reverse the credit on the inputs lying in stock and also on the inputs contained in the finished goods. The waste product cannot be considered as finished good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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