Per Gowri Shankar :

The respondent to this appeal by the Commissioner, manufacturers cold rolled coils and sheets of iron or steel. Part of the production of these sheets or coils are cleared by it without payment of duty to M/s. Shree Pre-coated Steel Limited, Pune. While the process details are not forthcoming from the appeal or either side, it is not in dispute that M/s. Shree Pre-coated Steel Limited subjected these steel sheets to some further processing and thereafter exported them. The clearance made by the respondent to the exporter was in terms of Notification 47/94. This notification, issued under Rule 13 of the Central Excise Rules, 1944, permits manufacture in bond of goods for being exported subject to the provisions of Chapter X of the Rules being followed.

2. The respondent had taken modvat credit of the duty paid on the inputs used in the manufacture of the steel, which were cleared in terms of the notification. The notice was issued to it proposing to deny the benefit alleging that in accordance with Sub rule (1) of Rule 57CC, the respondent was required to pay, before clearance of this steel, a sum equal to 8% of the price of the goods. The notice proposed excl