SHREYANS INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) HEARD both sides.

(2.) THE appellant filed this appeal against the order -in -appeal passed by the Commissioner (Appeals). The brief facts of the case are that the appellants are engaged in the manufacture of paper and were availing the benefit of credit in respect of inputs used in the manufacture of paper and the same was cleared on payment of duty. With effect from 1 -4 -2001 the appellant opted for benefit of Notification No. 3/2001, dated 1 -3 -2001 in respect of the paper and paperboard or articles made therefrom manufactured, starting from the stage of pulp, in a factory, and such pulp contains not less than 75% by weight of pulp made from material other than bamboo, hard woods, reeds or rags etc. The Revenue issued a show cause notice asking reversal of credit in respect of the inputs lying in stock and finished goods lying in stock in view of the provisions of Rule 57AG of Central Excise Rules. The adjudicating authority confirmed the demand and imposed a penalty.

(3.) THE contention of the appellant is that they were manufacturing various types of papers and they were availing the benefit of Notification No. 3/2001 in respect of the one quality of paper only. Other type of papers such as paper of textbook etc. were being cleared on payment of duty. The contention is that common inputs are being used in the manufacture of all papers and during the period they availed the benefit of Notification No. 3/2001 in respect of one type of paper. The appellants were also paying duty in respect of the paper, which is not covered under this notification. The contention is that as they were taking credit in respect of common inputs used in respect of paper, which is cleared under Notification No. 3/2001 and cleared on payment of appropriate duty, therefore, the reversal of credit in respect of inputs lying in stock and credit in respect of the inputs contained in the final product is uncalled for.