TaxTMI 
TaxTMI 
1995 (12) TMI 196
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....et aside the order passed by the Assistant Collector, wherein the Assistant Collector confirmed the demand of Rs. 4,97,118.88 being the Central Excise duty leviable on inputs lying in stock as on 30-9-1987. 2. The Department in the first instance issued a show cause notice to the respondents herein alleging that they had not fully accounted for the inputs lying in stock as on 30-9-1987 as having been disposed of in the manner specified  under Chapter VAA of the  Central  Excise Rules, 1944. It was also stated that the respondents herein had taken credit amounting to Rs. 4,97,118.88 paid on the inputs in their RG 23A account and had utilised the credit for payment of duty on the final product viz. Aerated Water falling....
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....al product and as per the provisions of the Rules, no correlation between the Modvat Inputs and the final products in the manufacture of which they were intended to be used, was necessary. The Assistant Collector held that the inputs lying in stock as on 30-9-1987 had not clearly been utilised in the manner prescribed nor were such inputs possible to be used in the subsequent period in view of the withdrawal of the Modvat Credit with effect from 1-10-1987, on Aerated Water under the Modvat Scheme and therefore, the recovery of Modvat Credit on inputs brought for use in the manufacture of Aerated Water, but unutilised as on 1-10-1987, is liable to be reversed. 5. The respondents herein filed an appeal before the Collector of Central ....
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....therefore, set aside and the appeal is allowed." 6. Ld. JDR, Shri S.N. Ghosh stated that in view of the withdrawal of Modvat facilities on Aerated Waters with effect from 1-10-1987 the inputs lying in stock with the respondents were not utilised in that manner and they also could not use the same in the future, as Aerated Water is no longer covered under the Modvat Scheme. Therefore, he stated that the order passed by the Assistant Collector is in order and the order passed by the Collector (Appeals) is liable to be reversed. 7. Ld. Advocate, Shri K.K. Banerjee appearing on behalf of the respondent firm contended that there is no specific provision under Modvat Rules providing for recovery of Modvat credit, in respect of any....
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....en referred to in the appeal. We find, the South Regional Bench of the Tribunal had dealt with an exactly similar situation in Collector of Central Excise, Guntur v. Sri Sarva Raya Sugar (Bottling Unit) Ltd., reported in 1992 (59) E.L.T. 125 (Tri.) = 1991 (37) ECR 617. It was held therein that there is no specific provision under Modvat Rules providing for recovering Modvat credit if, in respect of any particular commodity, credit allowed is utilised under Rule 57F and facility of Modvat is withdrawn and the inputs received prior to the date of withdrawal of the Modvat facility are still lying unutilised. Holding that credit had been correctly taken and utilised, they dismissed the Department's appeal. We find that this discussion of the Tr....