2002 (3) TMI 175

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....ed goods received by them from their sister concern under Rule 57F(4). Such goods received by them for job work were returned under the provisions of same rule without payment of duty. The appellants were issued show cause notice dated 3-8-99 in which they were called upon to show cause why the Modvat credit amounting to Rs. 76,084/- taken and utilised on the LPG used in the heat treatment of the semi-finished goods received by them from their sister concern for job work under Rule 57F(4) should not be recovered from them under Rule 57-I and why a penalty should not be imposed on them under Rule 57-I(4). They were further called upon to show cause why a penalty should not be imposed on them under Rule 173Q. After considering the reply of th....

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....nstant case, the finished product manufactured with the aid of input 'LPG' is not cleared on payment of duty but is cleared at 'NIL' rate of duty under Rule 57F(4), as such, the Modvat credit is not admissible on the input 'LPG' used in the manufacture of the goods received under Rule 57F(4). The ld. Consultant for the appellants submits that though as per the provisions of Rule 57C, no credit of specified duty is admissible on such quantity of inputs which is used in the manufacture of final product which is exempt from whole of duty of excise or is chargeable to 'NIL' rate of duty, but however, as per sub-rule (3) of Rule 57C, this restriction is not applicable to the fuel used as input. Similarly, the provisions of Rule 57CC(1) are also ....