TMI Blog1992 (12) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... their appeal. The amount in question has been demanded in respect of their final product Iron and Steel Scrap removed during the period from 27-3-1987 to August, 1987 produced by them by the dismantling and breaking up of an imported ship on which they had paid countervailing duty which had been taken as Modvat credit. It was held by the Collector that the credit of duty had been exhausted and the balance was not there for taking the clearance of the goods in question. 2. Shri N. Mookherjee, learned Advocate appeared for the petitioners. He submitted that the calculation of Modvat credit disallowed by the Depart- ment corresponding to the quantity of scrap cleared during the period when the same was exempted from Central Excise duty was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,46,835.21 is beyond their capacity. 3. Shri A. Choudhury, learned Departmental Representative replied to the arguments advanced by Shri Mookherjee. He supported the order. He contended that the notice was within time as the same was issued in September 1987 and sought to recover duty on clearances of scrap effected in March - August 1987. The applicants are a profit making firm with good turnover and the financial hardship is not borne out. He, therefore, pleaded that the stay requested for may be refused. 4. We have considered the arguments advanced by both the sides. We have perused the record. We find the notice issued by the Superintendent on 22-9-1987 sought to disallow Modvat credit of Rs. 9,41,378.95 and to realise Rs. 2,46,835 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven rise to the quantity of 3695.144 M.T. which was what was actually cleared. The applicants contention is that the amount to be disallowed should be only based on the quantity cleared by them and not the notional input quantity corresponding thereto as worked out by the Department. We find that the contention raised by them is that the basis of arriving at the quantity of inputs giving rise to the particular quantity of the final product has not been properly indicated. This is a matter which will be gone into in detail while the appeal itself is taken up for disposal. But at the present juncture when we are concerned with the stay petition, we feel, in principle, the stand of the Department that the Modvat credit to be disallowed on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or short paid will come to the fore for being regulated under Section 11A of the Central Excises and Salt Act. Such a situation arose in this case when the goods became dutiable again with effect from 27-3-1987 and were actually cleared during the period commencing therefrom and ending with August 1987. In this period 853.960 M.T. Steel Scrap was cleared against the credit in the RG-23A Part II account. The notice of demand had been issued in this connection in September 1987 and this will be within the time frame stipulated in Section 11A of the Act. Hence the issue of notice does not get disqualified either on the ground of limitation or of the competence of the officer who had issued the notice. The amount of the notice of demand which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded. On the question of financial hardship also, we find from their Balance Sheet as on 31-3-1991 made available by them that they have appreciable sales turnover of the order of Rs. 98 lakhs. The Gross Profit is Rs. 15 lakhs approximately. They have cash and bank balance of Rs. 1.86 lakhs and a sum of Rs. 3.41 lakhs as Sundry Debts due to them from their debtors. We, therefore, direct them to deposit the amount of duty demanded and report compliance on 15th February, 1993. Subject to compliance with the order, the appeal will be taken up for disposal on 7-5-1993. In the event of failure to deposit the amount in question, the appeal is liable to be dismissed in terms of Section 35F of the Central Excises and Salt Act. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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