FLEX INDUSTRIES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) These appeals relate to the same issue. Therefore, they are being taken up for hearing together and are disposed of under this common order.

(2.) The appellant manufactures polyester films. The main input is PTA and MEG. The inputs purchased by the appellant are first sent to job workers for converting them into polyester chips and the polyester chips are received in the appellants factory for further manufacture into polyester films. The despatch of PTA and MEG directly from the suppliers to the appellant's job workers is permitted by Rule 57J of Central Excise Rules and the appellant is entitled to take Modvat credit equal to the duty paid on PTA and MEG.

(3.) In the present appeal, the dispute raised is whether the restriction relating to, only 95% of the credit being available on inputs, (Notification No. 5/94 -C.E. as amended by Notification No. 14/98 -C.E.) is applicable to the PTA and MEG sent for job work. The contention of the appellant is that the restriction is not applicable in view of the fact that Rule 57], under which the credit is taken, has a non obstante clause "notwithstanding anything contained in these rules". It is being contended that in view of the non obstante clause, provisions in the other Modvat Rules including Rule 57A would not be applicable and the appellant would be entitled to full credit of the duty paid. It is also being contended that this issue remains settled in favour of the assessee by the Single Bench decision of this Tribunal in the case of Motor Industries Co. Ltd. v. CCE, Bangalore - .