TaxTMI 
TaxTMI 
1998 (6) TMI 219
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....r relates to disallowance of Modvat credit on the ground that malted food extracts called "DMI-70" manufactured by the appellants were not in fact used as an input in the manufacture of the appellants' final products,namely, malted food products "Horlicks" and "Boost" classifiable under Chapter sub-heading 1901.19 of the Schedule to the Central Excise Tariff Act, 1985. 2. The appellants operate two factories, one at Nabha in Punjab and another at Ballabgarh near Faridabad in Haryana. Both the factories use duty-paid raw materials in the manufacture of final products in terms of declaration made under Rule 57G of the Central Excise Rules, 1944 for taking Modvat credit on the inputs. They manufactured DMI-70 at their Nabha factory and....
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....taining the microscopic nature of the product, the bags were thereafter opened in dehumidified temperature, representative samples taken for purposes of certifying that the goods were fit for direct human consumption and marking made to recommend clearance for export. While the untested DMI-70 was accounted for in Form. IV/RG 23A, tested DMI-70 was accounted for in RG 1. The tested DMI-70 was thereafter cleared under bond. According to the appellants the elaborate processes undertaken by the appellants amounted to `manufacture' in terms of Section 2(f) of the Central Excise Act, 1944 since the DMI-70 cleared for export was a product distinct and different from the untested DMI-70 and inasmuch as the untested DMI-70 was an input in relation ....
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....etical exercises. Ld. Counsel submitted that the provisions of Rule 12A and the notification issued thereunder make it clear that the duty paid on DMI-70 at Ballabgarh Unit was available to them as rebate. Further, Explanation 1 to Rule 12 defines the expression "manufacture" as including the process of blending of any goods or making alternations or any other operations thereunder. Rule 12 therefore indicates that rebate is available not only on duty paid on the excisable goods exported but also of the duty paid on materials used in blending or making alternations or any other operations. Notification No. 41/94 as amended clearly provided for rebate of duty paid on the excisable goods for export. The notification contained only the conditi....
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....allabgarh had not been utilised for the manufacture of Horlicks/Boost in their Ballabgarh factory. This was violates the provisions of Rule 57F(1)(i). He drew the attention of the findings of the Commissioner to the effect that Modvat rules are not applicable at all in the present case inasmuch as their product DMI-70 was ultimately exported under Bond. The appellant's claim for the benefit of the proviso to Rule 57F(4) was not available to the appellants. In view of these facts, the appellants were clearly not entitled to take Modvat credit on the duty paid on DMI-70 on the quantity transferred by them from Nabha to Ballabgarh. Ld. DR also submitted that the Commissioner had rightly observed that if the appellants had any difficulty in exp....