CCE Vs. PARASRAMPURIA SYNTHETICS LTD.

JUDGEMENT

(1.) The issue involved in this appeal, filed by Revenue, is whether the benefit of exemption under Notification No. 49/94 -CE (N.T.) dated 22.9.94 is available to the goods manufactured and removed by the Respondents, M/s. Parasrampuria Synthetics Ltd.

(2.) Shri Vikas Kumar, learned SDR, submitted that the Respondents manufacture polyethylene Terepthalate (Polyster Polymer Chips) and avail of MODVAT Credit of the duty paid on the inputs under Rule 57A of the Central Excise Rules, 1944; that a show cause notice dated 1.1.1996 was issued to them for recovering Modvat Credit wrongly taken by them and for imposing penalty is they had cleared their final product Polyster Polymer Chips at ail rate of duty against C.T -2 Certificates issued Under Notification No. 49/94 -CE(N.T.); that the Asst. Commissioner under Adjudication Order No. 61/2000 dated 13.10.2000 allowed the Modvat Credit on the ground that the restriction of non -availment of Modvat Credit on inputs used in export goods envisaged under Rule 57 -C is not applicable as the final products cleared for export/deemed export cannot be said to be cleared at nil rate of duty or under full exemption; that the Commissioner (Appeals) also, under the impugned Order, rejected the appeal filed by the department holding that clearances without payment of duty do not contribute clearances of goods either exempted from the whole of the duty or chargeable to nil rate of duty placing reliance on the decision in the cases of Orissa Synthetics Ltd. v. CCE, 1995 (77) ELT 350 and Reliance Industries Ltd. v. CCE, 1995 (78) ELT 595 (Tribunal). The learned SDR, further, submitted that in terms of Rule 57 -C of the Central Excise Rules, 1944 at the relevant time, no Credit of the duty was to be allowed on the inputs which have been used in the manufacture of final products which are exempt from whole of the duty of Excise leviable thereon or are chargeable to nil rate of duty except in cases where the final products are cleared to a unit in Free Trade Zone/Electronic Hardware Technology Park/Software Technology Park, or to a unit which is a 100% E.O.U.; that the final goods have been cleared in the present cases to none of such units and as such provisions of Rule 57 -C arc applicable and the Modvat Credit Taken by the Assessee on the inputs used in final products cleared without payment of duty is not admissible to the Respondents.

(3.) Countering the arguments Shri K.K. Anand, learned Advocate, submitted that the provisions of Rule 57 -C are not applicable as the final goods removed by the Respondents are neither exempted from payment of whole of the duty leviable thereon nor are chargeable to nil rate of duty as the goods are cleared in terms of Notification No. 49/94 -CE(NT) which is not an exemption notification; that the said notification has been issued under the provisions of Rule 13 of the Central Excise Rules, 1944 and not under Section 5A of the Central Excise Act. Reliance has been placed on the decision in the case of High -Tech Carbon v. CCE, Allahabad, 2001 (47) RLT 803 (CEGAT) and CCE, Ahmedabad v. Omkar Textile, 2002 (51) RLT 988 (CEGAT).