9911796707
TMI Blog1997 (5) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... chasing aluminium scrap from the open market. The aluminium scrap was being received by them in their godown which was outside the factory premises and permission of the department was sought and obtained for storing aluminium scrap in the godown outside the factory premises. From there aluminium scrap was being sent to the job workers for conversion into fans' parts. The appellants took deemed Modvat credit on the aluminium scrap. The department alleged that the deemed Modvat credit was not admissible to the appellants on the ground that the inputs were not received in the factory premises and that aluminium scrap comprised of old aluminium articles, used and broken aluminium machinery parts and other various articles and since the goods w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 351/86-C.E., dated 20-6-1986. He submits that this Rule speaks of "notwithstanding the provisions of Rule 57G (2)". The ld. Counsel submits that no doubt Rule 57G (2) stipulates the receipt of the inputs in the factory but this condition of receipt of the inputs in the factory was waived by Rule 57-J. He submits that when Rule 57-J is read with Notification No. 351/86-C.E. they were legally within their right to take deemed Modvat credit on aluminium scrap. 5. In so far as the deemed Modvat credit on aluminium scrap is concerned, they purchased aluminium scrap from the open market, therefore it was the duty of the department to prove that no duty was paid on the goods. He submits that nothing has been brought on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation, learned Counsel submits that in one case, the show cause notice was issued on 12-4-1993 covering the demand for the period 1-4-1988 to 31-1-1993 and in the other case the show cause notice was issued on 16-4-1993 covering the period 1-4-1988 to 31-1-1993. He submits that in both cases, the demand is partly hit by limitation and since there was no contravention of any Rules or of the Act with the intent to evade payment of duty, the demand was partly time-barred. 8. The learned Counsel also agitates the imposition of penalty and quantum thereof. He submits that the appellants had rightly availed the deemed Modvat credit and therefore the penalty was not warranted. Concluding his argument, the learned Counsel prays that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat so much quantity was issued and relatable to the issue. 11. On the question of imposition of penalty, the ld. JDR submits that the amount of duty involved in one case was of Rs. 72,33,764.96 and in the other case Rs. 1,42,956.50 that looking to the amount of duty involved, the penalties of Rs. 15 lac and Rs. 35,000/- were reasonable. 12. Heard the submissions of both sides. We find that there are four issues involved in the two appeals. 13. The first issue is whether the deemed Modvat credit can be taken on the inputs if the inputs are received directly by the job workers and the intermediate product is cleared without payment of duty under Notification No. 351/86-C.E. 14. The second issue is whether the deemed M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason to disagree with the decision of the Tribunal. Following the ratio of this decision, we hold that this issue also in favour of the appellants. 19. Regarding 867.785 Kgs. of copper winding wires, we find that at the time of visit of the Central Excise Officers these copper winding wires were in excess of the recorded balance. The contention of the appellants was that this was not an excess quantity but was in the form of defective goods or scrap. The fact remains that even if these wires were in the form of defective goods or scrap, it should find a place in any of the records. The appellants could not produce any records except saying that it was recorded at the time of receipt and issue. Since this quantity of copper winding wir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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