1993 (12) TMI 119

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....tral Excise, Cochin dated 16-8-1993, directing the reversal of Modvat credit in a sum of Rs. 2,11,812/- on the waste/scrap of Graphite Electrodes used as an input by the appellant in the manufacture of Calcium Carbide for the period July 1989 to Feb. 1991, by issue of show cause notice dated 12th April, 1992 by invoking the longer period of limitation in terms of proviso to Section 11A of the Central Excises and Salt Act, 1944, the 'Act' for short, read with Rule 57-I of the Rules. 3. Shri Vadhwan, the learned Consultant for the appellant at the outset submitted that initially the Department joined issue with the appellant on the question as to whether the Graphite Electrodes was an input at all eligible for Modvat credit and this i....

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....e Department, including the sale proceeds of scrap. 4. Shri Gregory, the learned SDR contended that waste generated is liable to excise duty and has been admittedly sold in some quantity and therefore, is proved marketable on the showing of the appellant itself. Therefore, the credit taken in regard to the same is liable to be reversed, inasmuch as the appellant did not follow the procedures in terms of Rule 57F(4) of the Act under the Modvat Scheme. The learned SDR submitted that the appellant also did not keep the Department informed about the sale of the goods in question, rendering them liable to be proceeded against on grounds of suppression by invoking the longer period of limitation. 5. We have carefully considered th....

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....the Modvat credit for the reason that the appellant had not followed Rule 57F procedure in regard to the clearance of the waste generated in the course of manufacture of the notified finished product. The Modvat credit sought to be reversed is equivalent to the amount of the input contained in the waste generated. I observe that various Rules have been framed for Modvat purposes with reference to the various stages envisaged and which have to be taken into consideration for the purpose of allowing the Modvat credit and recovery in case the same has not been properly taken. Rule 57A permits taking of Modvat credit in respect of notified inputs and the procedure for taking Modvat credit has been set out in Rule 57G. It is not in dispute that ....