Full Judgment
of India Order No. 342/1/88-TRU, dated 1-3-1989 and took deemed credit at a rate of Rs. 500 per/MT. The appellants wanted to clear the inputs under Rule 57F(1)(ii) of the Central Excise Rules, 1944 and filed a classification list claiming clearance of the goods at a rate of Rs. 500/MT. The normal rate of duty was Rs. 700 per MT. on the goods in terms of Notification No. 57/89, dated 1-3-1989. A Show-cause-notice was issued to the appellants and the lower authorities decided the issue against the appellants holding that the appellants were required to pay duty at a rate of Rs. 700/MT. Hence the appeal before us. None appeared for appellants nor there is a request for disposal of the appeal on merits. The issue being a simple one it was decided to proceed with the appeal.
2. Shri Ram Sharan, Ld. JDR submits that the provisions of Rule 57F are very clear in as much as the present case is concerned. Assessee wants to clear inputs for home consumption. These inputs were brought under the provisions of Modvat scheme. He is required to pay duty as if the goods were manufactured in his factory. He submits that once a request is made for removal of the inputs from the factory for home, consumption the normal rate of duty shall be chargeable on such goods.
He reiterated the findings of the lower authorities. The Ld. JDR submits that duty has been correctly demanded and confirmed by the lower authorities and prayed that the appeal may be rejected.
3. Heard the submissions of Ld. JDR, considered the evidence on record.
We find that the limited issue for [determination] in this appeal is as to what should be the rate of duty applicable to inputs on which the deemed Modvat credit has been taken. In the instant case deemed Modvat credit on the inputs was taken at the rate of Rs. 500/MT. We also note that rate of duty on the inputs on the date of removal was Rs. 700/MT.The question therefore arose as to which of the 2 rates of duty will be applicable in the present case. We find that there is no ambiguity in the Rules. Rule 57(F)(1)(ii) specifically lays down that inputs may be removed from the factory on payment of appropriate duty of excise, as if such inputs have been manufactured in the said factory. Considering the issue in the light of this specific requirement of the law, we find that the normal rate applicable to the inputs will Rs. 700/MT. on the date of removal and therefore the duty payable on the inputs will be Rs. 700/MT. However, there was a proviso to this rule which further clarified that such duty of excise was in no case to be less than the amount of credit taken under Rule 57A. We note that this proviso shall become applicable only when the rate of duty on the date of removal happens to be less than the amount of deemed Modvat Credit taken. In the instant case the fact remains that on the date of removal of the inputs the rate of duty was more than the deemed Modvat Credit taken on the inputs. In the circumstances we do not see any legal infirmity in the order of Ld. Collector. We uphold the impugned order and reject the appeal.