2014 (7) TMI 193

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....he appellants availed modvat credit facility of the duty paid on molasses being raw material for manufacture of Ethyl Alcohol (rectified alcohol) and on clearances of it they paid 8% of its price in terms of rule 57 CC of Central Excise Rules, 1944. From their monthly returns it was observed by the department that during the last 12 months the appellants manufactured and cleared only exempted goods i.e. rectified alcohol out of molasses on which modvat credit facility was availed and did not manufacture and clear Ethyl Alcohol denatured for which modvat credit on the input molasses is admissible. The appellants took modvat credit of Rs. 6,52,582/- on molasses during March, 2000 and reversed Rs. 3,26,928/- on clearances of exempted goods bei....

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.... at nil rate of duty. As per records of the appellants for March, 2000, they cleared 2,78,000 BL of Ethyl Alcohol valued at Rs. 40,86,600/- and paid duty of Rs. 3,26,928/- @ 8% of value of exempted goods) for which 13,051,64 Qtls of molasses was used involving duty of Rs. 6,52,582/-. There was absolutely no manufacture/clearance of Denatured Ethyl Alcohol, a dutiable product during this period on which input credit on molasses was admissible. From above it is clear that during the relevant period the appellants only manufactured and cleared exempted final product i.e. Ethyl Alcohol for which they were not entitled for the credit of duty of input 'molasses' in contravention of provisions of erstwhile Rule 57 C(1) of Central Excise Rules, 194....