TaxTMI 
TaxTMI 
1997 (10) TMI 182
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....odvat credit utilised by them to the extent of Rs. 2,56,530.90 should not be recovered for wrongly utilising the said credit for the period 18-11-1992 to 30-12-1992 in contravention of the provisions of Rule 57A, 57G and 57F(3) of the Central Excise Rules, 1944. A corrigendum dated 14-7-1993 was issued seeking correction of the amount of Rs. 1,72,019.50. Another show cause notice dated 24-12-1993 was issued under Section 11A on the same facts seeking a demand of Rs. 2,05,601.83. Both these amounts have been confirmed in the Order-in-Original. 2. The facts of the case are that the appellants are engaged in the manufacture of HDPE/PP tapes, woven fabrics and woven sacks falling under Section 39 of the Schedule to the Central Excise Tari....
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....t lying unutilised on 16-11-1992 in their RG 23A Pt.II maintained for HDPE/PP tapes, as was evident from the RT 12 Return for the month of November, 1992 and the documents submitted therewith by the assessee. 5. The department alleged that in terms of Rule 57F(3)(i) read with Rule 57C the inputs in respect of which credit of duty has been allowed are required to be used in or in relation to the manufacture of final products, for which such inputs had been brought into the factory. Therefore, it was alleged that they had wrongly utilised the credit of the said amount which was not admissible to them. Hence they were required to pay through PLA. The amount was amounted by the corrigendum notice dated 14-3-1993 to the extent of Rs. 1,72,....
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.... Rule 57A as the inputs falling under sub-heading 3902.10 continued to be used in the manufacture of fabrics/sacks as earlier to 16-11-1992. Therefore, the utilisation of Modvat credit was correct. They also pointed out that as per Rule 57D, Modvat credit is not to be denied if during the course of manufacture of final products of intermediate comes into existence which is exempted from duty. The tapes were intermediate products which were exempted under the said Notification and the dutiable final products were sacks and fabrics. It was contended that upto 16-11-1992, they were availing Modvat credit of duty paid on inputs used in the manufacture of tapes which were cleared on payment of duty even though the same were used captively in the....
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....xcise, as reported in 1990 (46) E.L.T. 395 and MRF Ltd. v. Collector of Central Excise, as reported in 1990 (50) E.L.T. 546 and Mangalore Chemicals & Fertilizers v. Deputy Commissioner as reported in 1991 (55) E.L.T. 437. 7. The learned Additional Collector did not examined the judgments on this point covering the issue. On the basis of his understanding, he held that the final product declared were HDPE tapes only and that the other final products HDPE fabrics and sacks had been declared after 16-11-1992 and that the credit earned on inputs prior to 16-11-1992 was to be utilised for discharging duty liability on HDPE tapes being final product declared in the declaration filed under Rule 57G. He has held that it is a fact that due to ....
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....n place due to change in classification of the goods, it cannot be held that the assessee had any intention to evade duty of excise so as to attract the penal provisions of Rule 173Q. 8. The appellants raised all the points on the technical breach and violation and that the substantive provision of the Modvat credit cannot be denied to them and also cited all the judgments before the Commissioner (Appeals). However, the Commissioner (Appeals) in a very brief order, without due consideration of all the points has upheld the Additional Collectors' order, hence this appeal. 9. The learned Counsel submits that the issue is no longer res integra and the matter has been decided in the case of H.M. Bags v. Collector of Central Excise, ....
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....of Chapter 39 of the Schedule. Accordingly, they filed a declaration on 16-11-1992 classifying the product under various sub-headings of Chapter 39. They also claimed total exemption from payment of duty on the product namely, HDPE under the said Notification, as the said product was used captively in the factory for manufacture of final product namely, HDPE fabrics and sacks. The appellants were using the inputs for manufacture of tapes before 16-11-1992 and also after 16-11-1992. The tapes arise as an intermediate product in the manufacture of fabrics and sacks, which was declared as final product with effect from 16-11-1992. Therefore, the inputs used in the manufacture of tapes are deemed to be the same inputs, which are used in the man....