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2. The learned Counsel has contended that notification No. 355/86-CE dated 24.6.1986 allowed only set off of the duty paid by the appellants on the input cut tobacco used in the manufacture of cigarettes, towards the duty payable on the final product i.e. cigarettes and as such, they should be deemed to have paid full duty on the final product and thus were within their right to recover the full duty from the customers. He has also contended that on the final product i.e. cigarettes, the amount of duty payable by the appellants did not change, only mode of payment of duty was altered through the above said notification by allowing the appellants to claim set off on the duty already paid on input (cut tobacco) used in the manufacture of the final product. Therefore, the appellants having paid full duty on the final product had rightly recovered the same from the customers. The provisions of Section 11D could not be invoked against them. To substantiate his contentions, the Counsel has placed reliance on the law laid down in Bripanil Industries Ltd. v. Commissioner of Central Excise Bangalore , J.K. Synthetics 1996 (81) ELT 648, Atul Products Ltd. v. CCE Surat 2000 (123) ELT 697 : 2000 (88) ECR 449 (T) and Good Year India Ltd. v. Union of India 1999 (49) ELT 39.

7. In the instant case, the wording of the above said notification is quite plain, clear, unambiguous and leaves no doubt to hold that it is a notification issued under Rule 8(1) of the Central Excise Rules allowing exemption from payment of duty on the final product i.e. Cigarettes, to a manufacturer to the extent to which he had paid the duty on the input i.e. cut tobacco. It no where speaks of allowing the manufacturer to claim set off or modvat credit against duty paid on the inputs utilized in the manufacture of the final product. The notification cannot be said to be akin to the modvat credit scheme or allowing set off of the duty. It simply allows exemption from payment of duty on the final product to certain extent and not on the input.

9. Similarly, the Circular of the Board dated 1.4.1981 which contained only instructions to the filed officers and prescribed procedure to be followed for claiming set off under various exemption notification, is also of not much avail to the appellants. It is a general circular laying down the procedure to be followed for claiming set off and it was issued much prior to issuance of the exemption notification in question. As observed above, the notification in question is a simple exemption notification allowing exemption of duty on the final product i.e. cigarettes, to the extent to which the duty was paid on the input cut tobacco by a manufacture.