1996 (10) TMI 256

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..... Murugandy, DR, for the Respondent. [Order per : V.P. Gulati, Member (T)]. - The issue in the appeal relates to grant of Modvat credit in respect of inputs contained in the waste arising in the course of manufacture of HDPE woven sacks. The appellants received duty paid granules which were subjected to various processes including formation of tapes and which ultimately were utilised in the ....

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....ea of the learned Consultant is that inasmuch as initially the granules had suffered duty the duty paid character of the same does not change for the reason of Modvat credit having been taken for the same and therefore in terms of Section 57F(4) no duty will be payable in respect of the waste to be cleared from the appellants' factory. He has pleaded there is no provision in law to deny the appell....

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....hat case the benefit of notification was available subject to the condition that the inputs out of which the goods had been manufactured had suffered duty. Since Modvat credit was taken in respect of the inputs the Department sought to deny the benefit even when the appellants offered to reverse the Modvat credit taken in respect of the goods. The Hon'ble Supreme Court has held that in case the Mo....

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....yment of duty in respect of the same in case the same were cleared from the factory as such. The granules therefore which have been claimed to have suffered duty at one stage for the reason of Modvat credit having been taken in respect of the same cannot be construed as duty paid for the purpose of notification and the benefit of notification therefore as claimed is not admissible. We also observe....