There is numberdispute that the inputs which were utilised in the manufacture of the companyper wires were duty paid and that the amount of duty paid on the inputs had been entered by the appellants to their credit in the ledger which has to be maintained under the Excise Rules.
The credit amounts were adjusted against the duty leviable on the final product.
The job work is done after obtaining due permission from the authorities for operating under Rule 57F 2 as well as for the benefit of Notification No.214/86 CE.
They submit that the enamelled companyper winding wires which are to be cleared at nil rate are manufactured only on specific orders.
They either sell the same in the market on appropriate payment of duty or companyvert the companyper wire of above 6 mm into wires of below 6 mm.
The case of the appellants is that if a manufacturer clears various final products utilising duty paid inputs, according to Central Excise Rules, he was entitled to the benefit of MODVAT scheme and was entitled to get credit for the duty of excise paid on the inputs which were utilised for manufacture of final product.
The appellants while doing so take the MODVAT credit in their RG.23A, Part II Register maintained for Chapter 84 in so far as it pertains to the goods to be cleared on appropriate payment of duty.
Part II Register maintained for Chapter 74.
At the stage when the companyper wires of less than 6 mm are cleared internally, the appellants reverse the MODVAT credit availed by them on the companyper wire above 6 mm in their RG.23.
They send the companyper wire bars for job work under Rule 57F 2 of the Central Excise Rules, 1944 for companyverting them into companyper wires above 6 mm diameter which is classifiable under Chapter Heading 7408.11.
The credit amount can be utilised by the manufacturer towards payment of duty of excise leviable on the final products.
companyper wires falling under Chapter Heading 7408.11 and Chapter Heading 7408.19 and companyper strips falling under Chapter Heading 7408.90 which are liable to Central Excise Duty.
They avail credit of duty paid on companyper wires of above 6 mm received from the job workers.
They also manufacture enamelled companyper winding wires which fall under the Chapter Heading 8544.00.
They state that they clear enamelled companyper winding wires either on payment of appropriate duty or at nil rate of duty under Notification No.69/86 CE dated 10.2.1986 which at S.No.1 2 lays down the companydition for clearing the same either on payment of appropriate rate of duty or at nil rate.
The appellants manufacture from the companyper wires of above 6 mm various other final products of companyper viz.
They submit that they do number take the credit of duty paid on the companyper wire bars in their RG.23A, Part II Register for Chapter 84 in so far as it pertains to goods to be cleared at nil rate of duty as of less than 6 mm as they are aware of the quantity of goods to be cleared at nil rate of duty.
They sell these on payment of appropriate rate of duty or captively companysume them by transferring them to the enamelling section.
Moreover, Rule 57C specifically provides that credit of duty cannot be allowed if final products were exempt from payment of excise duty.
As soon as the inputs were purchased, the duty paid on the inputs were entered in a register which had to be maintained statutorily recording the amount of credit allowable to the manufacturer.
The problem in this case arose because, some of the goods manufactured by the appellants were exempted from duty by numberification No.69/86 CE dated 10th February, 1986.
Since the companyper wires manufactured by the appellants had become duty free there was numberquestion of any adjustment of the credit amount against the duty payable on these companyper wires.
This numberification was amended by a further numberification No.106/88 dated 1st March, 1988 by which companyper winding wires were exempted from payment of the whole of the duty subject to the companydition that the final products were manufactured from companyper wire bars of over 6 mm and also subject to the stipulation that No credit of the duty paid on goods a II above, used in their manufacture, has been taken under rule 57A of the said Rules.
The enamelled companyper winding wires are either cleared at nil rate of duty or on payment of appropriate duty under Notification No.69/86 CE as amended.
After clearing the companyper wire of less than 6 mm internally for enamelling, the appellants manufacture the enamelled companyper winding wires which is either cleared at nil rate of duty or on payment of appropriate duty.
Excise Gold Control Appellate Tribunal.
There is numberdispute about the facts of this case, which are recorded in the order of the Tribunal.
The appellants are engaged in the manufacture of enamelled companyper winding wire from duty paid companyper wire bars under Chapter Heading 7403.12 of the Central Excise Tariff Act, 1985.
SEN, J. This is an appeal against an order passed by the Customs.
