9911796707
TMI Blog1997 (9) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... the Schedule to the Central Excise Tariff Act, 1985. The process of manufacture involves re-rolling of input without involving the process of melting. According to the department, appellants are not entitled to deemed credit in terms of Order No. 342/I/88/TRU, dated 12-7-1990, since the deemed credit, as per that order, is allowed only if inputs are not clearly recognizable as being non-duty paid or only exempted from duty or charged to nil rate of duty. The Assistant Collector has allowed the Modvat credit on the ground that the appellants have claimed deemed credit on the basis of another deemed credit Order No. 342/I/88-TRU, dated 12-7-1990 which is issued in respect of re-rollable material and as per this order, the deemed credit is allowed on re-rollable materials of iron and steel if these are used without undergoing the process of melting in the manufacture of goods falling under Chapter 72 or 73 and accordingly, assessee is eligible to deemed credit since the conditions of the deemed [credit] are fulfilled. On the other hand, the Collector (Appeals) on an application filed by the department under Section 35E(4), held that as the inputs have been moved from the mill after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal in the case of M/s. Omega Alloys Castings Pvt. Ltd. v. C.C.E., Indore - 1994 (71) E.L.T. 923 (Tribunal), wherein it has been held that inputs purchased from market to be deemed duty paid unless proved otherwise by department goods exempt from duty also not treatable as non-duty paid or charged to nil rate of duty - Rule 57G(2) second proviso of Central Excise Rules, 1944. 4. Arguing for the assessee, Shri Rajesh Chhibber, ld. Advocate submitted that the dispute is in respect of deemed credit order and though different deemed credit orders were dealt with in the respective impugned order, taking into consideration the similar wordings of the relevant deemed credit orders and particularly with reference to the deemed credit orders issued in respect of re-rollable material, the deemed credit cannot be denied. He submitted that the issue with reference to the deemed credit in terms of the respective deemed credit orders has been covered by the decision of the Tribunal in the case of Machine Builders' v. C.C.E. reported in 1996 (83) E.L.T. 576 (Tribunal) up to 1-4-1987 and for subsequent period, the issue has been squarely covered by the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no condition or clause that inputs are clearly recognisable as being non-duty paid and in the absence of such clause and since they have fulfilled the condition in using re-rollable materials without undergoing the process of melting, the deemed credit cannot be denied. Both the relevant deemed credit orders are as under : Order under Rule 57G Modvat - Deemed credit in respect of iron and steel, copper, aluminium, zinc and lead - Regarding. - After considering the representations received regarding grant of credit of duty paid on various ferrous and non-ferrous metals on a deemed basis, the Government have, in supersession of Order F. No. 342/1/88-TRU, dated the 1st June, 1989, decided to issue the following directions under the second proviso to Rule 57G(2) of the Central Excise Rules, 1944. 2. The inputs specified in column (2) of the Table hereto annexed and falling under heading Nos. or sub-heading Nos. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) specified in the corresponding entry in column (3) of the said Table, purchased from outside and lying in stock on or after the 16th day of July, 1990 with the manufacturers manufacturing the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le materials of iron or steel purchased from outside and lying in stock on or after the 16th day of July, 1990 with the re-rollers may be deemed to have paid duty at the rate of Rs. 630/- per tonne, and the credit of duty under Rule 57A of the said Rules in respect of such ingots and re-rollable materials used, without undergoing the process of melting, in the manufacture of goods falling under Chapter 72 or 73 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), may be allowed at the rate of Rs. 630/- per tonne, without production of documents evidencing the payment of duty. This order shall come into force on the 16th day of July, 1990. S/d- (R.K. Mahajan) 6. It seems that Govt. had issued two deemed credit orders on the very date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lers who were availing the benefit of Notification No. 1/93. This exception in favour of the small scale manufacturers has been carved out taking into consideration the difficulties of this category of manufacturers and they have been exempted from the requirement of production of gate passes, invoices and other relevant documents evidencing payment of duty in respect of the inputs in question in case the same are purchased by them from the open market. Vide the said order, a legal fiction has been carved out vide which the inputs purchased from outside are deemed to have discharged the burden of duty liability without the production of any document evidencing payment of duty. In the instant case also, the inputs have been purchased by the appellants from M/s. Rourkela Steel Plant who are not the first manufacturer of the goods in question. As is clear from the description of the goods, the same are old, used, rejected and other scrap in the shape of structurals and machinery equipments which are in the form of re-rollable scrap. As such, the scrap purchased by the appellants from M/s. Rourkela Steel Plant has to be equated to the scrap purchased from outside and as deemed to be du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emsp;The position in Appeal No. 1721/95 filed by the department is somewhat different from the appeals filed by the above assessees, since the period involved in this appeal is from 3-12-1986 to 19-6-1987. It appears that no separate deemed credit order was issued up to 1-4-1987 with reference to re-rollable materials. In other words, deemed credit orders issued in general in respect of iron and steel, copper, aluminium, zinc and lead rule the field up to 1-4-1987 even in respect of re-rollable materials. Because of the clause therein that no credit is available on such inputs are clearly recognisable as being non-duty paid or wholly exempt from duty or charged to nil rate of duty. Since the issue with reference to said clause in the deemed credit order has already been considered by the Larger Bench in the case of Machine Builders [1996 (83) E.L.T. 576] holding that no credit is available if the goods are clearly recognised being not duty paid or charged to nil rate of duty or wholly exempted from duty and in the circumstances of the case and in the absence of any evidence to show that the inputs have suffered the duty following the ratio, I hold that assessee is not entitled to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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