2001 (8) TMI 182

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....h proviso to Section 11A(1) of the Central Excise Act. Penalty of equivalent amount has also been imposed under Rule 173Q and 57-I read with Section 11AC of the Central Excise Act, along with confirmation of interest at the rate of 24%. 2.The appellants are engaged in the manufacture of Carbon Black, which is one of the principal raw material for the manufacture of tyres. During the relevant period, the appellants were availing the Modvat credit and were clearing their final product carbon black on payment of duty. However, some of the clearances were effected without payment of duty under the provisions of Rule 13 inasmuch as the carbon black was to be used in the manufacture of tyres which were ultimately to be exported by the tyre man....

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....mpugned order passed by the Commissioner. 4.We have heard Shri Devinder Sharma, learned Consultant appearing for the appellants and Shri Mewa Singh, learned SDR for the Revenue. The impugned order has been assailed on merits as also on the point of limitation. 5.The appellants have strongly relied upon the Tribunal's decision in the case of Orissa Synthetics Ltd. v. CCE, Bhubaneswar reported 1995 (77) E.L.T. 350 (T) laying down that in respect of removal of goods without payment of duty in terms of Notification issued under Rule 191BB, such removals cannot be treated as duty exempt clearances attracting the Board's circular issued under Rule 57C with regard to availability of Modvat credit on the inputs. Reliance has also been placed ....

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....d has been confirmed against the appellants by denying the benefit of Modvat credit in respect of the inputs used in the manufacture of carbon black cleared without payment of duty under the provisions of Rule 13(1)(b). The Tribunal in the case of Orissa Synthetics Ltd. has held that duty paid on the inputs used in the manufacture of man-made staple fibre cleared without payment of duty under Rule 191BB read with Notification No. 33/90-C.E. cannot be equated to clearances of the final product attracting nil rate of duty or exempted from payment of duty. In these circumstances, Rule 57C is not applicable and the Modvat credit in respect of the inputs cannot be denied to the assessee. We find that Rule 191BB was omitted w.e.f. 1-10-1994 and t....