2002 (2) TMI 1008

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....ants are engaged in the manufacture of aluminium products, for which they use lime as one of the raw materials. During the material period, lime was exempt from duty of excise under the aforesaid notification. The manufacturers of lime had paid duty on the product at the time of clearance to the present appellants. Credit of that duty was taken by the appellants. That credit was proposed to be denied by the department, by show cause notice issued to the party, on the aforesaid ground. The proposal was contested by the party. The Commissioner, who adjudicated the dispute, upheld the department's view and denied the Modvat credit. Hence the present appeal. 4. Ld. Advocate, Shri A.C. Jain submits that the issue involved in the appeal s....

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.... the Central Excise Rules, 1944. Following the ratio of the decision in Eveready Industries (supra), the Bench held that such credit could not be disallowed on the ground that no duty of excise was payable in law on the input at the material time. On a perusal of the decision in Eveready Industries (supra), I find the ratio of that decision in the following sentence contained in para 1.4 of that Order :- "The authorities below have no power to disallow the part of duty paid on inputs as Modvat credit on the ground that such duty was not payable........" It appears to me that this ratio has been correctly followed by the Bench in Industrial Cables (supra). The Supreme Court's decision cited by ld. DR has also been examined. The facts o....