ORDER
Archana Wadhwa
1. The appellants are engaged in the manufacture of Printing Ink falling u/s.h. No. 3215.00 of the Central Excise Tariff Act, 1985. The appellants manufactured and consumed 20 kgs. of printing ink for manufacture of 20 kgs. catalytic agent falling u/s.h. No. 3815.00 during the month of March 1996 without disclosing the factum of captive consumption in the declaration was filed u/r 173B of the Rules. As such the Revenue entertained a view that they are liable to pay the central excise duty of Rs. 630/- on the said 20 kgs. printing ink so used by them.
2. It was further noticed that 20 kgs. of catalytic agents manufactured by the appellants paid the duty of Rs. 8,246.00 by debiting the same from the Modvat Credit Account. The view of the Revenue is that inasmuch as the catalytic agent was not specified by the appellants as one of the final products in their declaration made under the provisions of Rules 57G, the appellant are required to pay again the said amount of duty.
3. Based upon the above two counts Show-cause Notice was issued to the appellants which culminating into impugned order passed by the Asstt. Commr. of Central Excise confirming demand of duty against them and also imposing personal penalty of Rs. 1,000. After against the same failed.
4. I have heard Shri P.C. Das, learned Advocate for the appellants and Shri A.K. Chattopadhyay, learned JDR for the Revenue.
5. The appellants had initially entered 20 kgs. of printing ink in their RG-1 record but the same was found to be defective and unfit for use as printing ink. Accordingly after making note in their records the same was used with admixture of additional solvent in the manufacture of catalytic agent cleared on payment of duty by debiting Modvat credit in RG-23A Part II. The appellant’s contention is that inasmuch as the printing ink was not cleared by them and was consumed captively, no duty is leviable on the same. In respect of second issue they refer to the guidelines of the Ministry as contained in D.O. Letter No. 334/4/94-TRU dated 15.3.95 which specify that Modvat credit once availed can be utilised for payment of duty on any final product. In any case I find that catalytic agent was cleared on payment of duty though by utilising the Modvat credit, the question of confirmation of demand of duty again on the said item is not justified. The Modvat credit was earned rightly and correctly by the appellants and the same can be utilised towards payment of duty on any final product. The fact of non-declaration of the final product would be that duty paid out of the Credit would be credited again in the appellant’s Account and could be used for clearance on any of the final product. As such it is seen that the same is only revenue neutral exercise. Similarly the captive consumption of printing ink in the manufacture of final product cleared on payment of duty would not attract any duty on the printing ink. Accordingly the impugned order is set aside and the appeal filed by the appellants is allowed.
(Pronounced)