ASIAN PAINTS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is an appeal against the Order -in -Original No. 3/Demand/96, dated 22 -1 -1996 passed by the Commissioner of Central Excise, Vadodara disallowing Modvat credit of Rs. 2,04,324.14 under Rule 57 -I of the Central Excise Rules.

(2.) THE appellants are manufacturing Paints, Varnishes, Thinner and Pre -treatment Chemicals. They have manufacturing units in various States in India. All the four manufacturing units are integrated paint manufacturing units with in house facilities to produce various synthetic resins such as Alkyds, maleics, phenolics, acrylic emulsions and other resins which are used captively as media in the manufacture of the finished excisable goods viz. paints and varnishes. The Appellants were availing Modvat credit on various inputs used in the manufacture of their final product namely paints and varnishes. They use such inputs which include pentaerythritol, phthalic anhydride, VEN oils, in their manufacture of final products but through an intermediate resin stage. It is to be stated here that due to multi plant structure the appellant had to transfer resins to other factories after obtaining relevant sanctions under excise law.

(3.) A Show Cause Notice was given on 20 -9 -1994 to the appellants calling upon them to reverse the Modvat credit wrongly availed to the tune of Rs. 2,04,324/ - inasmuch as they utilised the credit of duty paid on inputs used in a final product viz. Alkyd Resin which was not declared to the proper officer under Rule 57G of the Central Excise Rules hence the said sum was payable under Rule 57 -I read with Rule 173Q(1)(bb) of the Central Excise Rules.