Judgment:
1. The revenue filed this appeal against the order-in-appeal dated 16.2.2000 passed by the Commissioner (Appeals).
2. Brief facts of the case are that the respondents are engaged in the manufacture of alloy and non-alloy steel wire and also availed benefit of MODVAT credit. During the period from 3/96 to 5/96, the respondents cleared 162.192 Mts. of tyre beed wire to M/s. Ralson India Ltd. and M/s. Dewan Rubber India Ltd against CT-2 certificates. The respondents availed the benefit of MODVAT credit amounting to Rs. 4,19,189/- on the inputs used in the manufacture of tyre beed wire. Notification no.
49/94 provides that tyre beed wires are exempt from payment of duty when supplied as intermediate goods to the ultimate exporter. The tyre beed wires were used by M/s. Ralson India Ltd. and M/s. Dewan Rubbed India Ltd. in the manufacture of tyres which were exported. A show cause notice was issued to the respondents on the ground that no MODVAT credit is available on the inputs used in the tyre beed wire cleared at nil rate of duty. The adjudicating authority confirmed the demand whereas the Commissioner (Appeals), in the impugned order, allowed the appeal filed by the respondents relying upon the decision of the Tribunal in the case of J.K. Synthetics Ltd. vs C.C.E. reported in 1996 (87) E.L.T. 389.
4. The contention of the revenue is that tyre beed wires were exempt from whole of the excise duty under notification no. 49/94 CE when supplied as intermediate goods to the ultimate exporter, therefore, these goods have not suffered any duty. The revenue is also relying upon a Circular No. 16/92-CE dated 1.6.92 to say that in such a situation, the manufacturer of intermediate product would not be entitled to avail any MODVAT credit. The Tribunal in the case of Orissa Synthetic Ltd. vs C.C.E. reorted in 1995 (77) E.L.T. 350, in a similar situation, held in favour of the manufacturer. The facts in the case of Orissa Synthetic Ltd. are that M/s. Orissa Synthetic Ltd. are availing the credit of duty-paid inputs, which are used by them in the manufacture of MMSF, which cleared by then under notification No.33/90-CE dated 5.9.90 to another manufacturer without payment of duty.
Notification no. 33/90-CE permits the goods to be removed without payment of duty for supply to the manufacturer of final products, which are exported. The MMSF, manufactured by M/s. Orissa Synthetic Ltd, was used in the manufacture of final products, which were exported and the Tribunal, after considering the Circular No. 16/92-CE dated 1.6.92 held that provision of Rule 57-C of Central Excise Rules are not applicable in the case of removal of goods without payment of duty in terms of notification 33/90-CE dated 5.9.90. In the present case also, the tyre beed wire was cleared under notification 49/94, which is para meteria of notification 33/90-CE and the tyre beed wires for use in the manufacture of tyres, which were ultimately exported.
5. In view of the above decision of the Tribunal, I find no infirmity in the impugned order. The appeal is dismissed.