TaxTMI 
TaxTMI 
1995 (12) TMI 72
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....ter Heading 7403.12 of the Central Excise Tariff Act, 1985. They send the copper wire bars for job work under Rule 57F(2) of the Central Excise Rules, 1944 for converting them into copper wires above 6 mm diameter which is classifiable under Chapter Heading 7408.11. The job work is done after obtaining due permission from the authorities for operating under Rule 57F(2) as well as for the benefit of Notification No. 214/86-C.E. The appellants manufacture from the copper wires of above 6 mm various other final products of copper viz. copper wires falling under Chapter Heading 7408.11 and Chapter Heading 7408.19 and copper strips falling under Chapter Heading 7408.90 which are liable to Central Excise Duty. They also manufacture enamelled copp....
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....e of duty. They submit that the enamelled copper winding wires which are to be cleared at nil rate are manufactured only on specific orders. They state that they clear enamelled copper winding wires either on payment of appropriate duty or at nil rate of duty under Notification No. 69/86-C.E., dated 10-2-1986 which at S. Nos. 1 & 2 lays down the condition for clearing the same either on payment of appropriate rate of duty or at nil rate. 3.The case of the appellants is that if a manufacturer clears various final products utilising duty paid inputs, according to Central Excise Rules, he was entitled to the benefit of MODVAT scheme and was entitled to get credit for the duty of excise paid on the inputs which were utilised for manufacture ....
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....res. Moreover, Rule 57C specifically provides that credit of duty cannot be allowed if final products were exempt from payment of excise duty. Faced with this situation, the appellants reversed the credit entries of duty paid on inputs which were utilised for manufacture of the duty free copper wires. 5.The case of the Excise Department is that the reversal of credit entries are not permitted by the rules. The assessee is not entitled to remove the copper wires without payment of duty since credit of the duty paid on the inputs used in the manufacture of copper wire had already been taken in accordance with Rule 57A. Once appropriate entries have been made in the register, there is no rule under which the process could be reversed. Since....
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....ucts is debited in the credit account before the removal of such exempted final products." This circular deals with a case where the manufacturer produces dutiable final products and also final products which are exempt from duty and it is not reasonably possible to segregate inputs utilised in manufacture of the dutiable final products from the final products which are exempt from duty. In such a case, the manufacturer may take credit of duty paid on all the inputs used in the manufacture of final products on which duty will have to be paid. This can be done only if the credit of duty paid on the inputs used in the exempted products is debited in the credit account before the removal of the exempted final products. 7.In view of the a....