TaxTMI 
TaxTMI 
2009 (11) TMI 302
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....factory which is engaged in the manufacture of yarn is an 'input' within the meaning of Rule 57A and 57B of the Central Excise Rules and the petitioners are entitled to claim Modvat on the same. 2. Briefly stated the facts of the case are that the petitioner Company is a Company incorporated under the Indian Companies Act, 1956. it has set up a Unit in the Industrial area for Baddi for manufacture of yarn made out of cotton, acrylic, viscose, polyester etc. According to the petitioner since there is an acute shortage of electricity it is using HSD oil for generating the electricity for captive use in its plant. The petitioner Company sources the HSD oil from various Oil Companies and excise is paid on this HSD oil. The petitioner Company....
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....es that Modvat credit can be taken only in respect of those inputs which have been specifically notified under Rule 57A and since HSD has been excluded there is no merit in the case of the petitioner and the same should be dismissed. 6. To appreciate the rival contentions of the parties it would be pertinent to refer to Rule 57A sub-clauses (1) to (5) and Rule 57B(l) which read as follows: "Rule 57A. Applicability. - (1) The provisions of this section shall apply to such finished excisable goods (hereinafter, in this section, referred to as the "final products"), as the Central Government may, by notification in the Official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional dut....
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....ation and allow the credit of such declared duty deemed to have been paid in such manner and subject to such conditions as may be specified in the said notification even if the declared inputs are not used directly by the manufacturer of final products declared in the said notification, but are contained in the said final products. Explanation - For the purposes of the sub it is clarified that even if the declared inputs are used directly by a manufacturer of final products, the credit of the declared duty shall, notwithstanding the actual amount of duty paid on such declared inputs, be deemed to be equivalent to the amount specified in the said notification and the credit of the declared duty shall be allowed to such manufacturer. Ru....
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....that the Central Government may by notification in the gazette declare the inputs on which Modvat credit for the excise paid can be taken at the specified rates. Therefore, there is no merit in the contention of the petitioner that the government had no jurisdiction to notify the inputs for which Modvat credit could be taken in its notification. 8. We now come to the contention of the petitioner that since Rule 57B starts with a non-obstante clause this would override all the provisions of Rule 57A. Rule 57B no doubt starts with a non-obstante clause and under sub-clause (iv) of Clause (1) inputs used for generation of electricity are deemed to be in eluded in the definition of inputs but the explanation to Clause (1) clearly lays down t....