TMI Blog2003 (1) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... demand of Rs. 64,36,765/- on the steel scrap. A penalty of Rs. 6,18,77,325/- was also imposed under Rule 173Q of the Central Excise Rules. 2. Brief facts of the case are that the appellants are engaged in the manufacture of agricultural discs for agricultural harrows and clearing the same under exemption notification without payment of duty. A show cause notice was issued to the appellants for demand of duty on flat rolled product of alloy steel, which is an intermediate product on the ground that as the final product is exempt from duty, the appellants are liable to pay duty at this stage. The benefit of Notification No. 89/95-C.E., dated 18-5-95 was also denied in respect of scrap on the ground that the appellants were clearing the scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate product, then the scrap is arising during manufacture of final product, hence is entitled for the benefit of Notification No. 89/95-C.E. The contention of the appellants is that in case the demand is confirmed, the appellants are entitled for the benefit of Modvat Credit in respect of inputs used in the manufacture of their excisable product. Appellants also submitted that they are entitled for abatement of duty for arriving at assessable value as provided under Section 4(4)(d)(ii) of Central Excise Act. Appellants relied upon the decision of the Tribunal in the case of Maruti Udyog Ltd. v. C.C.E. reported in 2002 (141) E.L.T. 3. 6. The contention of the revenue is that the appellants never declared the manufacturing process of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me barred and is not sustainable. 10. As we hold that the intermediate product is excisable, therefore, the appellants are entitled for the benefit of Modvat credit in respect of inputs used in the manufacture of intermediate product on production of duty-paying documents. The appellants pleaded that the value of final product is taken into consideration for demanding duty on intermediate product. This also requires re-consideration by the adjudicating authority. Further, we find that to arrive at assessable value, the assessable value is to be re-calculated after giving necessary abatement of excise duty as held by the hon ble Supreme Court in the case of Maruti Udyog Ltd. (supra). 11. In respect of scrap, there is no evidence on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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