TMI Blog1990 (12) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... case of inputs which have been wholly exempted from duty albeit conditionally the benefit of modvat scheme was available to the respondents. 4. It was his submission that being wholly exempt from duty under various exemption notifications such as Notification Nos. 208/83, 152/86 and 178/84 they become clearly recognisable as being non duty paid, and in fact no duty is paid by the manufacturers on these goods at the time of their clearance from the factories. Hence the onus gets shifted to the assessees, desirous of claiming modvat credit, to prove that excise duty had in fact been paid on these inputs. 5. As such, a proof of payment of duty was required to be adduced to avail the benefit of the provisions regarding deemed credit. 6. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not duty paid and the benefit of deemed credit was required to be extended if the items in question were covered by the deemed credit provisions. 12. They would in this connection like to draw attention in particular to the order of the WRB in the case of Arun Auto Spinning and Manufacturing Company in which it has been held that deemed credit is admissible even if the products are received under a gate pass showing nil rate of duty. 13. Furthermore, it is well established that the goods in the open market are deemed to be duty paid unless proved otherwise and the open market for this purpose even includes factories. In this respect, he would like to draw attention to the Supreme Court s judgment reported in 1989 (43) E.L.T. 178 = 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) are required to be upheld. 19. The learned DR accepted that the facts are not in dispute and items are otherwise eligible for the benefit of modvat scheme and the cases are covered by orders of WRB and NRB as cited by the learned counsels. 20. However, he pleaded for a reconsideration of the departmental point of view as according to him the very basic principle involved in the modvat scheme was that the benefit was required to be extended only in those cases where some duty had actually been paid, and it was required to be restricted to the extent of such duty. Further in all these cases the goods were recognisable as non duty paid in view of their exempted character. 21. Hence they were hit by Clause (ii) of Government s orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss it is able to establish by enquiries that the particular material comes from the non-duty stream. In other words, the onus to prove that the goods were not duty paid was on the department and no general presumption has been raised that the goods cleared unconditionally under an exemption notification shall be treated as non-duty paid in character. Further, the department has not shown any specific ground or reason in favour of its point of view which had not been.............. It has also not been able to answer a question from the Bench to the effect that once it was known that there were many materials capable of being used as inputs which were exempted conditionally, why were they included in the deemed credit provisions if the intent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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