Per S.S. Sekhon:

The appellants are manufacturers of batteries and during the course of manufacture, they prepare 'Compound Rubber' which is captively consumed in the manufacture of Battery containers. The however did not file the classification list for these goods, being excisable, but claimed the benefit of Notification 71/68 dt. 1-4-68. The benefit of the notification is subject to the provision that Modvat Credit should not have been availed on the inputs contained in the manufacture of the goods. The Show Cause Notice dt. 10-9-90, for the period 1 -3-86 to 31 -5-90, was therefore issued. The Collector confirmed the demand. As he found there was no provision for the Reversal of MODVAT once credit was taken.

2. This was prior to the decision of the Supreme Court in the case of Chandrapur Magnet Wires Pvt. Ltd. 1996 (12) RLT 1 (SC) = 1996 (81) ELT 3 (SC). Therefore, the Tribunal set aside the order and allowed the appeal vide its Order No. 1087/76 dt. 25-6-96, to redetermine the penalty, after taking into consideration any evasion of duty established after considering the appellants plea for the benefit of the notification in question in the light of the facts in the case and