Per S.L. Peeran: This matter was referred to the Larger Bench by the regular South Regional Bench, Madras, for settling the controversy in the conflicting, decisions of the rulings of the Tribunal in the case of M/s SAE (India) Ltd. v. CCE reported in 1992(61) E.L.T. 726 (Tribunal) = 1992(40) ECR 343, which is in favour of assessee; with that of the ruling rendered in Revenue's favour by South Regional Bench as in the case of Ponds India Ltd. V. CCE reported in 1991 (56) ELT 574.

2. The Hon'ble President constituted this Bench for hearing and answering the points referred to it for its decision.

3. The point for determination in this appeal is as what is the rate of duty that is required to be paid in respect of duty paid inputs purchased and brought inside the factory; and on which Modvat credit had been utilized? and at the time of its removal for home consumption under Rule 57F(l)(ii) of Central Excise Rules, 1944.

4. The assessee had been manufacturing inter alia electric horn falling under Tariff Heading No. 8512 of Central Excise Tariff Act, 1985. They had filed classification list for clearing bought-out Modvat inputs, namely CRCA sheets falling. under Tariff Heading Nos. 7209.20,7211.49,7208.29 & 7211.41 as such, under Rule 57F (1)(ii) of Central Excise Rules, 1944 @ Rs. 735/- PMT. The assessee were issued with a show cause notice calling upon them to explain as to why the classification list should not be approved classifying the CRCA sheets under Heading Nos. 7209.20,7208.29,7211.41,721 1.49 attracting appropriate rate of duty as per Notification No. 60/90 dated 20.3.1990.

5. The assessee by their reply submitted that the wordings in Rule 57F(1)(ii), namely, "as if such inputs have been manufactured" carries the meaning that while clearing such Modvat inputs, they are required to follow the central excise procedure only and hence the CRCA sheets which have already suffered duty and on which no further process of manufacture has been carried on, it therefore, continues to remain as CRCA sheets and as such Rule 9A cannot be invoked and they be called upon to pay duty, as if they are the goods manufactured u/s2(f) and by invoking the charging Section 3 of the Central Excises & Salt Act, 1944. The goods already suffered duty, they are only being cleared for home consumption, therefore, the Rule. 57F(1)(ii) only stipulates that such goods which are removed for home consumption, should pay only appropriate duty, as had been discharged by them, at the time of bringing the goods in the factory, by treating the goods, as if manufactured in the factory. However, it did not mean that fresh rate of duty is worked out on the prevailing rates and make payment of duty over and over the rate of duty at which the goods had been brought inside the factory. The original authority did not agree with the assessee's contention and had held that the effective rate of duty in terms of Notification No. 60/90, dated 20.3.1990 is required to be paid, which was determined as follows:-

6. The learned Collector (Appeals) overruled the learned Asstt. Collector and accepted the assessee's plea, by following the ruling of the North regional Bench rendered in the case of SAE (India) Ltd. V. CCE (supra), hence aggrieved by this order, the revenue has filed this appeal u/s 35B of the Central Excises & Salt Act, 1944. The revenue has mainly relied in the case of Ponds (India) Ltd. (supra).

7. We have heard Sh. Murugandi, the learned DR for the appellant and S.h. Subhas Chandra, the learned Counsel.

8. Learned DR submitted that the reasoning adopted by the authority is consistent with the view expressed by South Regional Bench in the case of Ponds (India) Ltd. and it is required to be accepted. While learned Counsel submitted that the view expressed in SAE India Ltd. is the correct view and it is based on the correct interpreta