- (1.) Petitioners are engaged in the manufacture of Acid slurry, for which Sulphuric acid 70% concentrated, a raw-material, which was purchased by the petitioners having taken the benefit under Modvat Scheme.
(2.) The petitioners were allowed full benefit under Modvat scheme, on sulphuric acid. Thereafter, the impugned show cause notice dated 29-10-1991, Annexure-A6 to the writ petition, was served on the petitioner calling upon the petitioners to show cause why excess benefit availed under the Modvat scheme, be not recovered from it.
(3.) The contention of learned counsel for the petitioners is that once the entire sulphuric acid, in respect of which benefit under Modvat scheme was taken, is put to use in the manufacturing process then no part of benefit can be recovered from the petitioners, notwithstanding some quantity of sulphuric acid in diluted form remained unconsumed in the manufacturing process. It is said that once the entire sulphuric acid was put to use for manufacturing process, that becomes spent acid and therefore the petitioners cannot be subjected to any recovery of excess amount on the ground that part of the spent acid in diluted form, was saleable commodity.;