MODI RUBBER LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) BEING dissatisfied with the confirmation of the demand of duty of Rs. 9,059.34, the appellants have filed their present appeal.

(2.) SHORTLY put the facts of the case are that, the appellants are inter alia engaged in the manufacture of tyres/tubes/flaps and other rubber products falling under Chapter 40 of the Central Excise Tariff, 1985. It is said that for the purposes of manufacture of the above final products, the appellants used to purchase various raw -material including Synthetic Rubber (Cisemar) and had been availing the proforma credit of the duty on inputs under Rule 56A during the relevant period. They received Synthetic Rubber (Cisemar) on 13 -12 -1985 and intimated the Department vide D 3 Intimation No. 1093 and took credit of duty paid on Cisemar in their RG 23, Part II, under Rule 56A. Thereafter, they sent 9783 Kgs. of the aforesaid material on 30 -4 -1986 to M/s. Bombay Tyres International Ltd., Bombay, on loan after reversing the duty credit at the rate of 10% ad valorem which was the rate at which the credit of the duty was initially availed by the appellants. However, the Department formed a tentative view that since the duty on Cisemar was at the rate of 15% ad valorem on 30 -4 -1986, this quantity of Cisemar should have been cleared on payment of duty at the rate of 15% ad valorem instead of 10% advalorem, that is to say, the rate at which the duty was paid at the time of clearance and, therefore, there was a short levy of Rs. 9,059.34. Accordingly, a Show Cause Notice was issued to the appellants and the Assistant Collector after usual adjudication proceedings confirmed the demand. Against that Order of the Assistant Collector the appellants filed their appeal, but without success. Hence the present appeal.

(3.) ARGUING on behalf of the appellants, Shri R.K. Gupta, Officer of the appellants' company, submitted that Rule 57F(1) of the Central Excise Rules, 1944 allows the removal of inputs as such from the factory for home consumption on payment of appropriate duty of excise levied thereon. Once excisable goods have been cleared from the factory of the manufacturer on payment of duty at the appropriate rate under Rule 9, the same cannot be subjected to any enhanced rate of duty when removed from the factory of the assessee who had kept the goods under Modvat Scheme since the assessee is not manufacturer of the inputs and cited the case of SAE (India) Ltd. v. Collector of Central Excise, 1992 (61) E.L.T. 726. In reply, Smt. Ananya Ray, learned SDR, submitted that before the removal of the goods permission of the authority concerned is required and the facts of the said case of SAE (India) Ltd. v. Collector of Central Excise, supra, are distinguishable.