SPIC ELECTRONIC AND SYSTEM LTD. Vs. CCE

JUDGEMENT

(1.) The authorities below have confirmed the demand of duty of Rs. 8,60,077/ - by disallowing Modvat credit of the above amount which was used for the clearances of integrated circuits manufactured by the appellants. The ground for denying the modvat credit is that the inputs on which credit was originally taken were received prior to 16.3.1995 while 4th proviso to Rule 57F provides that credit of specified duty allowed in respect of any inputs may be utilised towards payment of duty of excise on any other final product whether or not such inputs have actually been used in the manufacture of such other final product, if the said inputs have been received and used in the factory of production on or after 16th March, 1995.

(2.) It is the contention of the appellants that the word "and" occurring in the above proviso should be read as "or" for the reason that the expression "if such inputs have been received" is redundant as inputs can be used in the factory of production only after they have received and use cannot precede receipt of inputs. We are, however, unable to bring ourselves to agree with the submission. As rightly pointed out by the Ld. SDR the word "and" has to be read as a conjunctive since the proviso stipulates that inputs should be received and used in the factory of production on or after 16th March, 3 995. The use of the word "and" was necessary for the purpose of linking the inputs received with their use in the factory of production, which is required under the Modvat credit scheme. In view of the clear language in the 4th proviso to Rule 57F(4) we hold that the credit is not admissible to the appellants and accordingly uphold the impugned order and reject the appeal.