2000 (5) TMI 449

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....9/125 2. The issue relates to denial of Modvat credit in terms or Rule 57H(7) of the Central Excise Rules. While scrutinising the RT-12 return the Central Excise Officers has objected that the assessee has paid/utilised the Modvat credit towards payment of excise duty on the clearances of tin waste & scrap to the tune of Rs. 7923.25 from RG23A Part-II Account and since the assessee has opted for full exemption under Notification No. 7/97 but not reversed the Modvat credit on tin scrap lying in the stocks to the extent of Rs. 67,650.40 under Rule 57H(7) of the Central Excise Rules. 3. Show cause notice was issued demanding duty of Rs. 75,623.63. The Assistant Commissioner who adjudicated the proceedings confirmed the demand i....

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....ot be treated as final product for allowing Modvat credit he referred to the following decisions :- CCE v. Erose Pharma (P) Ltd. - 1994 (73) E.L.T. 72 CCE v. Tarapur Cables (I) Ltd. - 1996 (85) E.L.T. 125 Asian Cables v. CCE - 1999 (109) E.L.T. 465 CCE v. Prima Plast (P) Ltd. - 1999 (112) E.L.T. 337 He also submitted that in the facts and circumstances the penalty was unwarranted. 5. On the other hand Shri Ashok Kumar, ld. JDR justified the action of the authorities below in ordering for reversal of the credit in terms of Rule 57H (7). He also submitted that the view expressed by the Tribunal in the case of M/s. Khanbhai Esoofbhai v. CCE, Calcutta reported in 1999 (107) E.L.T. 557 (T) is in favour of the Revenue on th....

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....in an example given in the said report :- "The manufacturer (Respondent) purchases 100 tonnes of barley malt on which, the respondent manufactures one thousand tonnes of Horlics. Out of this one thousand tonnes, if clears 250 tonnes. of Horlics from the Rajahmundry factory on payment duty. The remaining 750 tonnes is sent to the factory situated at Bangalore without paying duty under a bond. The 750 tonnes is put in unit containers and packages at the Bangalore factory and cleared from there on payment of excise duty. According to the appellant, he is entitled to take credit for the entire duty of Rs. 10,000/- (paid on 100 tonnes of barley malt) from out of the duty payable on 250 tons of Horlics cleared from Rajahmundry factory, whereas....

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.... the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year; and who has been availing of the credit of the duty paid on inputs before such option is exercised, shall be required to pay an amount equivalent to the credit, if any, allowed to him in respect of inputs lying in stock or used in any finished excisable goods lying in stock on the date when such option is exercised and after deducting the said amount from the balance, if any, lying in his credit the balance, if any, still remaining shall lapse and shall not be allowed to be utilised for payment of duty on any excisable goods, whether cleared for home consumption or for export". 8.&e....