1997 (10) TMI 232

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....cture of electricity and both these items are ultimately utilised for manufacture of final product namely carbon black falling under Chapter Heading 28.03 of Central Excise Tariff. The appellants had filed relevant Modvat declarations under Rule 57G for the purpose of availing Modvat credits on various duty paid inputs. It was stated by them that in terms of provisions of Rule 57A, which govern the definition of `inputs' for the purposes of eligibility to Modvat credit, were amended vide Notification No. 4/94, dated 1-3-1994, which inserted sub-clause (C) in the Explanation to the Rule, whereby inputs used as fuel were also granted eligibility to the credit. Consequently, they filed a Modvat declaration on 13-4-1994 for, inter alia, declari....

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....am or electricity generated to use as input for manufacture of carbon black. While rejecting the plea by the Commissioner he has relied on the judgment rendered in the case of Mysore Kirloskar Ltd. v. Collector of Central Excise as reported in 1990 (50) E.L.T. 175 and has come to the conclusion that both the goods do not emerge as intermediate goods and only those which emerge as intermediate product would be covered under the provisions of Rule 57-D, otherwise under the provisions of Rule 57-C. 3. Arguing for the appellants ld. Advocate submits that the Commissioner has misdirected himself and followed a citation which has been over-ruled by Madras High Court in the case of Ponds India Ltd. v. Collector of Central Excise as reporte....

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....nal product and therefore, the Department's conclusion that they are final product is without any merit. 5. I have carefully considered the submissions made by both the sides and have perused the judgments in this matter. At the outset, I am of the view that ld. Commissioner has wrongly followed the citation which has been over-ruled by Madras High Court in the case of Ponds India Ltd., therefore, the basis on which the Commissioner has proceeded, is unsustainable. The Commissioner's findings is based on the fact that steam and electricity are not an intermediate product but they are final product itself and as they are exempted from duty the question of extending Modvat credit does not arise. This finding has already been over-rule....