MAGNAM PAPER LTD. Vs. CCE

JUDGEMENT

(1.) THE issue involved in these two appeals, filed by M/s. Magnum Papers Ltd., is whether the MODVAT Credit of the duty paid on inputs is available to them during the month of March, 2000.

(2.) SHRI Rajesh Chibber, learned Advocate, mentioned that the Appellants have two units manufacturing paper and paper board and avail of MODVAT Credit of the duty paid on inputs, i.e. a number of chemicals; that they also avail MODVAT Credit of the duty paid on capital goods; that Notification No. 6/2000 -CE, dated 1.3.2000 (Sr. No. 77) grants exemption on first clearance on 210 M.T. of Paper and Paper Board for the month of March, 2000; that the Department has disallowed the MODVAT Credit involved in inputs contained in the semifinished/finished goods lying in stock as on 1.3.2000. The learned Advocate submitted that the benefit of Notification No. 6/2000 (Sr. No. 77) was available subject to the condition No. 15 specified in the Notification; that condition No. 15 does not mention any restriction about the availment of MODVAT Credit; that in respect of other products whom the exemption was granted under the said Notification, there was specific condition in the notification that the MODVAT Credit is not availed; that in view of this MODVAT Credit cannot be disallowed to them under Rule 57H of the Central Excise Rules, 1944. He also mentioned that the Appellants were having stock of finished goods in which modvatable inputs had been used and those goods were intact with them till they again started paying duty after availing exemption, on 11.3.2000. Finally he submitted that no penalty is imposable as the MODVAT Credit was not taken by them wrongly; that further as the issue is one of interpretation Rule 57H, no penalty is called for.

(3.) COUNTERING the arguments, Shri H.C. Verma, learned D.R., reiterated the findings as contained in the impugned order.