YEAST ALCO ENZYMES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India is filed challenging order dated 26th November, 1998 passed by the Assistant Commissioner of Central Excise, Bhavnagar - respondent No.3, order dated 27th December, 2000 passed by the Commissioner (Appeals) and order dated 8th January,2004 passed by the Customs Excise and Service Tax Appellate Tribunal. The following substantial reliefs are prayed :

(2.) The petitioner, a limited company is engaged in manufacturing of excisable goods falling under Chapter Heading No.2204.00 and 3823.00 to the Schedule of the Central Excise Tariff Act,1985. The petitioner manufactures Ethyl Alcohol (denatured) and Ethyl Alcohol (not-denatured), commonly known as "Rectified Spirit". That Ethyl Alcohol (not-denatured) is chargeable to 'nil' rate of excise duty while Ethyl Alcohol (denatured) attracts duty at the prevailing tariff rates. The petitioner exports Ethyl Alcohol (not-denatured). It is the case of the petitioner that it is entitled to Modvat Credit under the Central Excise Rules,1944 (the Rules).

(3.) On 3rd February,1997 the petitioner informed the Range Superintendent of Central Excise, Sihor , having jurisdicition over the petitioner, that the petitioner shall be maintaining separate account and inventory for manufacture and sale of Ethyl Alcohol (not-denatured) meant only for export sale and shall not avail of modvat credit benefit on molasses, which is used as inputs in the manufacturing process. It appears that on 31st March,1997 3,10,498 litres of finished products meant for export were in stock. According to the petitioner out of the aforesaid goods it was constrained to sell 1,10,498 litres in the local market as special denatured spirit and the petitioner paid excise duty amounting to Rs.2,59,641/-. On 14th June,1997 the petitioner wrote to the Range Superintendent intimating that it would like to avail of modvat credit on 482 MTs of molasses, worked out on pro-rata basis having been consumed in manufacture of 1,10,498 litres of Ethyl Alcohol (not-denatured) sold in the local market. This quantity of 482 MTs of molasses had borne duty to the extent of Rs.2,41,365/-. Thereafter the aforesaid intimation was followed up by letter dated 12th December,1997 and on 13th December,1997 the petitioner took modvat credit by making entry in RG23 Part-II to the extent of Rs.2,41,365/-.