TaxTMI 
TaxTMI 
2001 (9) TMI 678
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....Nandesari. There it converts the acetic acid to acetic anhydride. Rules 57K to 57P of the Central Excise Rules deals with the provisions relating to credit of money. Briefly, these rules empower the Central Government to specify the finished goods (final product) and raw material used in the manufacture of such goods (inputs) to which the scheme will apply. The scheme provides that credit of money is to be given to a manufacturer for use of inputs in the manufacture of final product. The rate at which credit is to be taken are to be specified in the notification. Notification 231/87 specified ethyl alcohol to be input in the manufacture inter alia of acetic acid and acetic anhydride. Credit of money was available in such manufacture at the ....
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....ing on the notice issued to the appellant proposing to recover the money credit the Asst. Collector, whose order has been confirmed by the Commissioner (Appeals) confirmed the proposal for duty. Hence this appeal. 4. The counsel for the appellant raised an argument which runs as follows. Notification 217/86 is different from other notification issued under Rule 8. Its purpose is not merely to exempt goods from duty. Its object is to avoid the unnecessary work that the manufacturer might otherwise have to face by way of paying duty on goods that he manufactures, taking the Modvat credit on such goods used as inputs in the manufacture of other goods in his factory or factories. This, he says, is the ratio of the Tribunal's decision in....
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....; there it would have to take credit and use that credit in the payment of duty on finished goods. 7. The Commissioner (Appeals) has declined to consider the applicability of the ratio of Baja Tempo Ltd. on the ground that Rule 57F(3)(b) permits inputs on which credit is taken, to be taken out of the factory for manufacture of intermediate product. Rules of money credit do not contain similar provision. Therefore she declined to follow the ratio of Bajaj Tempo Ltd. The departmental representative amplifies and explained this reasoning. He says the object of the Modvat scheme is to prevent what is described as "cascading effect" of duties on various stages of manufacture. Various goods may be involved in process of manufacture on eac....
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....sion that its object is to avoid unnecessary work in the case of goods captively consumed would still hold true. In the case before us, the manufacturer would have to pay duty on acetic acid at Ankleshwar, and take the duty as Modvat credit at Nandesari. 9. The object of the money credit scheme evidently is to provide an incentive to utilise certain goods in the manufacture of some commodities. If we substitute, in place of Modvat scheme the money credit scheme, the considerations that influenced the bench that considered Bajaj Tempo to come to its conclusion would still influence us. The net effect therefore would be the same and the object of the notification would be satisfied. The Supreme Court has applied these same principles ....