Full Judgment
2. This is in appeal filed by the appellants against the decision of the Collector (Appeals) made in Order-in-Appeal No. PCJ/73/SRT/93, dated 5-10-1993 whereunder he denied the Modvat credit amounting to Rs. 3,35,425/-.
3. The appellants are manufacturing tobias acid and G salt falling under Chapter 29 of the Schedule to the Central Excise Tariff Act. They were availing Modvat facility in terms of Rule 57A of the Central Excise Rules read with Notification 177/86. They filed declarations under Rule 57G. The appellants were using beta naphthol falling under Chapter 29 for the purpose of manufacture of finished goods and they were availing of the benefit of Modvat credit of duty paid on beta naphthol. They obtained the Modvat credit on the basis of the invoices given by the manufacturer of inputs under Rule 57A. They availed the credit of duty as indicated in the invoices issued under Rule 57A. The invoices of beta naphthol indicate effective rate of central excise duty and at the same time gate pass also indicates central excise duty under the head of RG 23A Part II register, P.L.A. register and set off register. Accordingly, the manufacturer of inputs beta naphthol recovered central excise duty in terms of Clause (i) and (ii) of Sub-rule (1) of Rule 57A. Show cause notice dated 20-11- 1991 was issued by the Range Superintendent denying the Modvat credit. It was alleged in the show cause notice that the appellants company purchased beta naphthol after availing set off under Notification 432/86 and the Modvat credit on set off under the said notification was not admissible. The Assistant Collector confirmed the same. An appeal was filed and the Collector (Appeals) also confirmed the same. Hence the present appeal.
4. It is contended before me that the set off duty is nothing but the duty to be paid under Central Excise Act. Reading of Notification 432/86 and the words used in the said notification speak the benefit of set off is to be availed from the duty paid inputs. Therefore they cannot be denied Modvat credit keeping in mind the provisions of Notification 177/86. It has been brought to my notice by learned DR that in the similar circumstances the Tribunal in the case of C.C.E. v.Abhideep Chemicals Pvt. Ltd. -1998 (102) E.L.T. 105 has denied Modvat credit, following the Tribunal's order made in the case of Syn-o-Chem Product v. C.C.E., Tribunal Order No. 49/93, dated 8-1-1993. In the said case it has been observed that once it is accepted that by application of Notification 432/86 duty is exempted on beta naphthol to the extent of the duty payable on the naphthalene used in its manufacture, and, in fact paid, is the duty payable according to tariff less the duty payable on the naphthalene used in the manufacture, while alone would be available as credit, and any amount of credit taken would not be credit of duty paid and is inadmissible. Hence following the said judgment, I dismiss the appeal of the appellant.