Per Shri R. Jayaraman - This is an appeal against the Order-in-Appeal No. KVV 128/.92-B II dt. 16.7.92, rejecting the appeal of the appellants.

2.1 The facts alleged in the S.C.Ns issued to the appellants are briefly as below :-

The appellants have filed a declaration under Rule 57 G of the Central Excise Rules for the availment of Modvat credit of various inputs such as PTA, M.E.G used in the manufacture of their final product P.O. Y/P.S.F. Some of the final products have been cleared at 'Nil' rate under rule 191 Band Rule 191 BB. Hence they are not eligible to avail the Modvat Credit of duty paid on inputs used in the manufacture of final products so cleared at Nil rate of duty under Rule 191B/191BB, which should be reverted. It is alleged that Credit of duty paid on inputs used in the manufacture of POY/PSF cleared at 'Nil' rate of duty under Rule 191B/191 BB has been utilised for payment of duty on the above final products cleared for home consumption, which is in contravention of Rules 57A read with Rule 57C and Rule 57F of the Central Excise Rules. Accordingly S.C.N, proposes to recover the credit alleged to have been availed of illegally. The demands have been issued within the time limit prescribed under Rule 571 of the Central Excise Rules.

2.2 The Asstt. Collector under his order No. V (57A) 4.9/92 dt. 23.4.92 confirmed the demands raised in four S.C.Ns totally aggregating about Rs. 5.87 crores by ordering reversal of credit taken on POY/PSF cleared under Rule 191B/191 BB of the Central Excise Rules. He also imposed a penalty of Rs. 5000/- on the appellants. On appeal before the Collr. (A), penalty imposed was set aside. On the main issue relating to order of reversal of Modvat credit, the Collr. (A) agreed with the Asstt. Collector, but directed the Asstt. Collr. to rework the demand. The present appeal is against the said order.

3. Shri Bhatt, the Id. advocate, on behalf of the appellants submits the following :-

(i) The main issue to be considered in the appeal is whether Modvat credit of duty paid on inputs used in the manufacture of declared final product, part of which was cleared under bond for export in terms of Rule 191 B/l91 BB can be permitted to be uti1ised for clearance of the final product for home consumption. The objection taken by the Deptt. is mainly on the basis that such POY/PSF cleared under bond in terms of Rules 191 B/l 91 BB are removals at Nil rate of duty and hence provisions of Rule 57C would stand attracted. The other objection of the dept. is that POY/PSF as such are not cleared for export under bond but they are to be further used in the manufacture of fabrics, which only are exported. Hence the benefit of proviso to sub rule (3) of Rule 57F would not be available.

(ii) He submits that both the objections are squarely covered by the decfsion of the East Regional Bench in their decision (videOrderNo.A477/Cal/1994dt. 30.5.94. (copy produced before us) in the case of appeal filed by M/s Orissa Synthetics Ltd. and also by this Bench's order in the case of C.C.E. Bombay III Vs. Indian Aluminium Co. (Vide Order No. 668-69/92-W.R.B. dt. 29.4.92). The Id. advocate took us through the issues raised in those cases and the findings given thereon to point out that in both the cases, the Tribunal have not agreed with the Revenue in disallowing credit of duty paid on inputs used in the manufacture of final products cleared under bond for export production in terms of Rules 191 B/l 91BB of the Central Excise Rules. He would therefore plead for allowing the appeals, since the issue is squarely covered these two decisions directly on the issues raised in this appeal.

4.1 Shri M.I. Sethna, the Id. counsel representing the Revenue, assiduously sought to urge that certain points of law were not considered in those decisions and hence the Bench should independently view the position, not being influenced by those decisions. In any case, if the Bench feels that these points of law are strong enough for acc