TaxTMI 
TaxTMI 
2003 (3) TMI 564
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....ory under Notification No. 217/86-C.E., dated 2-4-1986 without payment of duty. 2. Shri V. Lakshmikumaran, learned Advocate, submitted that the appellants are having various divisions in various premises at Faridabad; that the Tractor Engineering Division (TED) manufacture tractor parts which are removed to another division, namely, tractor division where parts are used in the manufacture of tractors; that these parts are cleared without payment of duty availing the benefit of Notification No. 217/86; that the department has disallowed the Modvat credit on the ground that Modvat credit is not admissible when the final goods are cleared without payment of duty. He, further, submitted that the dispute relates to applicability or otherwi....
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.... applying Rule 57C. It is not like any other exemption, where intention is to forego the levy on the products cleared from the factory." 3. Reliance has also been placed on the decision in the case of National Aluminium Co. Ltd. v. CCE, Bhubneswar - 1997 (95) E.L.T. 331 (Tribunal) wherein it has been held that the purpose of Notification No. 217 is to avoid scriptory work when the whole exempted intermediate product is utilized captively by the same manufacturer either in the same factory or in another factory in the manufacture of dutiable final product; that the Tribunal has held, further, that two factories of the appellants are to be treated as one otherwise the purpose of Notification No. 217/86 will be defeated and it cannot be ....
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....II v. Reliance Textile Pvt. Ltd. - 1986 (26) E.L.T. 227 (Tribunal) that transfer of polyster filament yarn from one unit to other unit for orientation and texturisation is not permissible without payment of duty. The learned SDR submitted that at the relevant time Rule 57C of the Central Excise Rules, 1944 provided that no credit of the specified duty paid on the inputs used in the manufacture of final product shall be allowed, if the final product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty; that as the final products of the appellants from the factory in question are tractor parts which are cleared without payment of duty availing the benefit of Notification No. 217/86 the credit of....
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....nt time provides as under :- "Credit of the duty not to be allowed if final products are exempt.-57C. No Credit of the specified duty paid on the inputs used in the manufacture of final product (other than those cleared either to a unit in a Free Trade Zone, or to a 100% Export-Oriented Unit, or to a unit in an Electronic Hardware Technology Park or to a unit in a Software Technology Park) shall be allowed, if final product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty." 6. It is thus apparent from the provisions of Rule 57C that for taking the Modvat credit of the duty, the inputs should not be used in the manufacture of final products which are exempt from the whole of the duty....