Rule 57F(2) cannot be used to move a final product as if it were an input for processing.

Rule 57F(2) of the Central Excise Rules, 1944 permits removal of inputs as such, or after partial processing, only for operations necessary for manufacture of the final product, with return for further use in production. On the stated facts, Di-Ethyl-Phthalate was itself the assessee's final product, while denatured ethyl alcohol was the input received back from the other factory, so the arrangement did not fit the statutory scheme. Payment of duty on clearance of Di-Ethyl-Phthalate further indicated that the rule could not be invoked for this transaction. Permission was therefore unavailable, and the revenue view was upheld.

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Issues: Whether permission under Rule 57F(2) of the Central Excise Rules, 1944 could be granted for removal of Di-Ethyl-Phthalate and its return after denaturation for use in the manufacture of the final product.

Analysis: The rule permits removal of inputs as such or after partial processing for specified operations necessary for the manufacture of the final products, with return of the material for further use in manufacture. On the facts, Di-Ethyl-Phthalate was itself the assessee's final product, while Denatured Ethyl Alcohol was the relevant input material received back from the other factory. The arrangement therefore did not fit the statutory scheme of removal of inputs for processing and return. The fact that the assessee cleared Di-Ethyl-Phthalate on payment of duty further showed that the rule could not be invoked for this transaction. The material received, if at all, would only support credit on the input received, not permission to remove the final product under the rule.

Conclusion: Permission under Rule 57F(2) was not available on these facts, and the order of the Assistant Commissioner rejecting the application was .

Final Conclusion: The appeal failed, and the revenue's stand that the requested removal arrangement was outside Rule 57F(2) was upheld.

Ratio Decidendi: Rule 57F(2) applies only to removal of inputs as such or after partial processing for operations necessary to manufacture the final product, and cannot be used where the material sought to be moved is itself the final product or where the transaction is otherwise inconsistent with the rule's scheme.

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