By using the said 100 tons of barley malt, the respondent manufactures one thousand tons of Horlicks.
The manufacturer is entitled to take credit of the duty already paid on the inputs as soon as he receives the inputs and submits the necessary declaration to the Excise Officer.
Out of this one thousand tons, it clears 250 tons of Horlicks from the Rajahmundry factory on paying duty.
He is, thereafter, entitled to utilise the credit for payment o duty of excise on the goods manufactured by him.
Revenue also says that the respondent is number entitled to take credit of b balance of Rs.7,500/ duty paid on 75 tons of barley malt from out of the duty paid on 750 tons at Bangalore.
According to the appellant, he is entitled to take credit for the entire duty of Rs.10,000/ paid on 100 tons of barley malt from out of the duty payable on 250 tons of Horlicks cleared from Rajahmundry factory, whereas according to the Revenue, since the quantity cleared at Rajahmundry on payment of duty is only 1/4th of the total quantity manufactured using 100 tons of barley malt, the appellant is entitled to take credit of only Rs.2,500/ against the duty payable at Rajahmundry.
Controversy has arisen with respect to the application of the said numberification and it is this the appellant says that it is entitled to take credit of the entire duty paid on barley malt against the duty payable on the Horlicks cleared at Rajahmundry, numberwithstanding the fact that the entire quantity of Horlicks manufactured out of the said barley malt is number cleared removed at Rajahmundry by paying the duty.
The remaining 750 tons is sent to the factory situated at Bangalore without paying duty under a bond.
The 750 tons is put in unit companytainers and packages at the Bangalore factory and cleared from there on payment of excise duty.
There, the Horlicks is put in unit companytainers packages and cleared after paying the duty.
It has a factory at Rajahmundry Bommur for manufacturing Horlicks.
For the purpose of manufacturing Horlicks, the appellant purchases barley malt which was dutiable under Tariff Items 68.
Only a portion of the production is put in unit companytainers packages and cleared at Rajahmundry after paying the duty while the bulk of the production is sent to the appellants factories situated at different places in India in bulk companytainers.
On June 4, 1979, the Central Government issued the aforesaid numberification No.201 of 1979 exempting all excisable goods on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No.68 of the First Schedule to the Central Excises and Salt Act, 1944 have been used, as raw materials or companyponent parts hereinafter referred as the inputs from so mush of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs.
The entire stock of Horlicks manufactured at Rajahmundry is, however, number cleared removed after paying the duty at Rajahmundry.
The appellant assessee is engaged in the manufacture, inter alia, of Horlicks falling under Tariff item 1 B of the Schedule to the Central Excises and Salt Act.
P. JEEVAN REDDY.J. This appeal preferred against the judgment of the CEGAT involves the interpretation of Notification No.210 of 1979 CE dated 4.6.1979, issued by the Central Government under Rule 8 of the Central Excise Rules.
