2001 (12) TMI 738

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....austic soda manufactured by the first unit is an input for the second. During the material periods, the appellants cleared (under Chapter X procedure) the caustic soda lye produced by the first unit, without payment of duty, to the second unit for utilization in the manufacture of viscose staple fibre. They were claiming the benefit of Notification No. 217/86-C.E., dated 2-4-86 while so clearing the goods. The second unit cleared viscose staple fibre on payment of duty. The credit of duty which the appellants had taken on the inputs used in the manufacture of the caustic soda lye in the first unit was utilized for such payment of duty on the second unit's staple fibre. The Department took a view that, by virtue of the provisions of Rule 57C....

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....heard both sides. Ld. Advocate Sh. Shekhar Vyas submits that the issue involved in the present case is not exactly the same as the one which the Larger Bench was seized of in the case of Kirloskar Oil Engines Ltd. and that the exact issue on hand has been decided in favour of assessees by 2-Member Bench of this Tribunal in the following cases :- (i)      Bajaj Tempo Ltd. v. CCE [1994 (69) E.L.T. 122 (Tri)] (ii)     National Aluminium Co. Ltd v. CCE [1997 (95) E.L.T. 331 (Tri)] (iii)    CCE v. Unique Chemical [Final Order No. 585/97-C, dated 21-10-97 in Appeal No. E/4213/92-C] (iv)    Escorts Limited v. CCE [1999 (107) E.L.T. 245 (Tri)] Drawing support ....

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....ld. Advocate. She prays for following the Larger Bench decision and upholding the impugned orders. 6. I have considered the submissions. The appellants, in their caustic soda unit, took Modvat credit of the duty paid on the inputs used in the manufacture of the caustic soda lye which was cleared, without payment of duty, to their Staple Fibre unit, availing exemption under Notification 217/86-C.E. The credit so taken was utilized by the appellants for payment of duty on their final product viz. viscose staple fibre. The Revenue's view is that, under Rule 57C, the party was not entitled to the benefit of such credit inasmuch as the product (caustic soda lye) in the manufacture of which the inputs were used was exempt from payment of ....