TMI Blog2001 (9) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... t payment of central excise duty in terms of Notification No. 202/88-C.E., dated 20-5-1988. Alleging that the materials purchased by the appellants from the open market and from the Railways were non-duty paid and thus, the exemption under Notification No. 202/88-C.E., was not admissible, show cause notice was issued on 21-7-1995 to M/s. Usha demanding duty for the period 1-8-1990 to 28-2-1994, invoking extended period of limitation after alleging suppression of facts. Penal provisions were also invoked. Similarly, show cause notice was issued on 30-1-1996 to M/s. R.H.L. for the period 1-6-1991 to 28-2-1994. The appellants pleaded in reply to the show cause notices that the materials purchased from the open market on the strength of the challans will have to be treated as duty paid, they had not purchased the materials from any factory or warehouse and that there was nothing to indicate that such materials purchased by them were non-duty paid. It was submitted that all along the understanding of the Deptt. was that the materials purchased from the market were deemed to be duty paid unless there was any proof to the contrary. No such proof has been adduced by the Department. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larations. On the basis of the various circulars issued by the Board they had a bona fide belief that the materials purchased by them were deemed to be duty paid and that they were eligible for the benefit of Notification No. 202/88-C.E. It was explained in the said notification that all stocks of inputs in the country except such stocks which were clearly recognisable as being non-duty paid or charged to nil rate of duty, shall be deemed to be the inputs on which duty had already been paid. There was no ground for invoking the extended period of limitation in any case for the period prior to 1-3-1992. On or after 1-3-1992 their case was covered on merits and reference was made to the amending Notification No. 33/92-C.E., dated 1-3-1992 he pleaded that both on merits and on limitation, both the impugned orders-in-original were not sustainable. In support of his contentions, reference was made to a number of decisions. In reply, Shri A.K. Jain, SDR submitted that the burden of proof was on the assessee to establish that the material purchased by them was duty paid. It has not been done in this case. He referred to the discussions in the impugned orders-in-original and pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notifications applicable to their final products. They had been availing of the benefit of Notification 202/88-C.E. without any objection by the Deptt. Even when Notification No. 202/88-C.E. was rescinded in the 1994 Budget and when they started paying duty on their final products at Adv. rates, the jurisdictional Asstt. Commissioner of Central Excise after scrutinising all their relevant documents had allowed the Modvat credit with ragard to the inputs lying with them, under Rule 57H of the Rules. 6. The appellants had also mentioned about a seizure on 3-12-1992, earlier show cause notice dated 28-5-1993, visit by the central excise officers and checking of the records on 18-1-1993 and 27-10-1994 and the statements of their representatives on 1-2-1995, to plead that the Deptt. was well aware of the fact that the appellants were eligible for and were availing of the benefit of exemption notification exempting their final products when made out of material purchased from the open market. 7. References have been made by the appellants to a number of clarifications issued by the Board from time to time. The sum and substance of these clarifications was that the material purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /1/88TR4, dated 12-7-1990, it was directed that the specified inputs purchased from outside and lying in stock on or after the 16th day of July, 1990, with the manufacturers manufacturing specified final products will be deemed to have paid the duty and production of documents evidencing payment of duty was not required. It was provided that if such inputs were clearly recognisable as being non-duty paid or wholly exempt from duty or charged to nil rate of duty, then the credit of duty on a deemed basis was not to be granted. The various instructions on the subject and the expressions used in the different notifications had raised genuine doubt, whether the rerollable materials purchased from the market could be considered as clearly recognisable as being non-duty paid . It is in this context that the plea of the appellants that they had bona fidely believed that the inputs purchased from the market was duty paid, had to be judged. In the case of Vivek Rerolling Materials v. CCE, Chandigarh - 1994 (73) E.L.T. 660 (Tri.), the Tribunal has taken a view that the extended period of limitation was not invokable when assessee in view of repeated clarifications of Central Board of Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods claimed to be duty paid actually had not borne the incidence of duty. (iv) Bhatia Steel Industries v. CCE, Chandigarh - 1999 (109) E.L.T. 722 (Tribunal). In a case where the rerollable material of iron and steel was pure based from the open market and the Deptt. had no evidence that the goods were clearly recognisable as non-duty paid or charged to nil rate of duty, deemed Modvat credit was admissible to the appellants. 9. Without further delving into this aspect of the matter, we consider that in the facts and circumstances or these cases, it could not be established and held against the appellants that they had suppressed the facts. At this stage, we recapitulate the following facts on record : (i) Both M/s. Usha and M/s. R.H.L. had filed declarations in proper form on 23-3-1990, 3-9-1991, 18-5-1992 and 28-4-1993. (ii) Both M/s. Usha and R.H.L. had been dealing in iron and steel products for a long period. They had disclosed the process of manufacturing of their final products. Subsequently, when the specific rate of duty were changed to ad valorem rates in the 1994 Budget, they obtained registration with the Deptt. and started claiming the benefit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. v. CCE, Bombay - 1995 (78) E.L.T. 401 (S.C.), it was held that the extended period of 5 years was not applicable just for any omission of assessee unless it was deliberate to escape from payment of duty. (Head Note Para 4). In the case of Northern Plastic Ltd. v. CCE - 1998 (101) E.L.T. 549 (S.C.), the Hon ble Supreme Court had said that laying claim to some exemption whether admissible or not was a matter of belief of assessee and does not amount to misdeclaration (Head Note, Paras 19 22). 11. Thus, without going into other aspects of the matter, we are of the view that in the facts and circumstances of both these cases, there was no justification for invoking the extended period of limitation. 12. For the period from 1-3-1992, the appellants had pleaded that their case was clearly covered for exemption under the amending Notification No. 33/92-C.E., dated 1-3-1992. This amending Notification No. 33/92-C.E. specifically included the rerollable material of iron and steel, other than stainless steel, as an eligible inputs (refer Sl. No. 10 of the Table annexed to the Notification). 13. Thus, even on merits, we find that no valid grounds have been taken by the ld. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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