KUNDALIA INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) BRIEFLY stated facts of this case are as follows : -

(2.) A question has arisen what would be the amount of Modvat credit which the appellants herein would be entitled to. For this purpose we have to look to Rule 57 -A. The said rule provides, by proviso to that rule, that credit of duty specified in respect of any goods produced or manufactured by 100% EOU and used in the manufacture of final products in any place in India shall be "restricted to the extent of duty which is equal to the additional duty leviable on like goods Under Section 3 of the Customs Tariff Act, 1975 (51 to 1975) equivalent to the duty of excise specified under (i) to (iid) above paid on such inputs".

(3.) ON the other hand, Revenue restricts the Modvat credit to 50% of the additional duty of Customs because this is what has been paid according to the Revenue in view of the provisions of Notification No. 97/91 -C.E. For justification of this, we reproduce the reasoning of the learned lower authority in para 12 of the impugned order : -