TMI Blog1997 (4) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... V register, they found that out of 328 colour picture tubes 273 colour picture tubes were lying rejected in the stores and were absolutely unfit for use on account of breakage/electrical fault/unremovable scratches or other unrepairable defects. The department alleged that since the Modvat credit is available only in respect of inputs used in or in relation to the manufacture final products and since the colour picture tubes found damaged could not be used in the manufacture of colour T.V. sets; therefore, no Modvat credit was admissible to the appellants. It was also alleged that the appellants had not received back certain quantity of picture tubes on which the Modvat credit was taken from the job workers within stipulated time; therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified time. The Collector also directed the appellants to reverse the Modvat credit of Rs. 6,357.09 in respect of inputs received short. Against this order, the appellants have come up in appeal before me. 4. Shri M.A.Rangaswamy, learned Advocate appearing for the appellants submits that the demand is hit by limitation in as much as the Modvat credit of duty was taken before March, 1991 whereas the show cause notice has been issued on 13-7-1992. The learned Counsel submits that even if the date of reversal of the Modvat credit is the material date it is also beyond the period of six months in as much as the Modvat credit was reversed in March, 1991 and the show cause notice was issued on 13-7-1992. On merits the learned Counsel submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement as alleged is established and that the demand has rightly been confirmed beyond six months by the lower authorities. 6. On merits the learned JDR submits that the colour picture tubes were not used in or in relation to the manufacture of colour T.V. sets and, therefore, they were not entitled to the Modvat credit on such colour picture tubes. He submits that the lower authorities have rightly confirmed the demand of duty on these colour picture tubes which were taken by them as credit under the Modvat scheme. He, therefore prays that the appeal may be rejected. 7. Heard the submissions of both sides. The admitted position was that colour picture tubes were available in the stock (Form-IV register). The only dispute between de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants and were being shown regularly in their RT 12 returns. Thus on the limitation issue also the appellants have a strong case in as much as show cause notice was issued on 13-7-1992 for the Modvat credit taken before March, 1991 and entry was reversed on 19-4-1991. Thus even if I take the date of reversed entry for counting the period of six months I find that the demand is clearly beyond six months and since there was no mis-statement or suppression; therefore, the demand is hit by limitation. In the circumstances the demand is time barred. 9. From the above discussions I find that both on merits as well as limitation the appeal is in favour of the appellants. In the circumstances the impugned order is modified to the extent sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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