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M/s Accurex Steel Rolling Mills Versus Commissioner of Central Excise, Panchkula

2016 (6) TMI 15 - PUNJAB AND HARYANA HIGH COURT

Entitlement to avail benefit of deemed credit of duty - Notification No. 1/93-CE dated 28.2.1993 - Re-rollable material used as inputs in terms of the order dated 1.3.1994 of Government of India, Ministry of Finance even after crossing the exemption limit of ₹ 75 lacs - Held that:- by following the various decisions of Tribunal and High Court's, the appellant is entitled to avail benefit of deemed credit of duty on re-rollable material. Accordingly, the order of the Tribunal dated 1.3.2004 .....

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nal, New Delhi (hereinafter referred to as the Tribunal ) claiming the following substantial questions of law:- (i) Whether the benefit of deemed credit order no. TS-36/94-TRU dated 1.3.1994 continues to be admissible to SSI unit even after crossing the exemption limit slab of ₹ 75 lacs in terms of notification no. 1/93-CE dated 28.2.1993 as amended? (ii) Whether notification No. 1/93-CE dated 28.2.1993 and deemed credit order dated 1.3.1994 have been correctly interpreted by the Tribunal? .....

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med credit on re-rollable material of iron or steel as per Government of India order dated 1.3.1994. As per the said order, the facility of deemed credit @ ₹ 920/- per metric tonne without production of documents evidencing the payment of duty was allowed qua ingots and re-rollable materials of iron or steel purchased from outside and lying in stock on or after the 1st day of April, 1994 with the re-rollers, availing of exemption under notification, Annexure P-1. A show cause notice dated .....

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edit on re-rollable materials would be available to the SSI units even after it crosses the turn over of ₹ 75 lacs in the Financial year. Feeling aggrieved, the department filed an appeal on 22.7.1997 (Annexure P-4) before the Commissioner (Appeals), who vide order dated 27.5.2003 (Annexure P-5) rejected the appeal. Still dissatisfied, the department filed an appeal on 25.8.2003 (Annexure P-6) before the Tribunal. The Tribunal vide order dated 1.3.2004 (Annexure P-7) allowed the appeal and .....

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rpreting the notification No. 1/93-CE dated 28.2.1993 and the deemed credit order dated 1.3.1994. It was further submitted that the order passed by the Tribunal is erroneous and is liable to be set aside. 4. On the other hand, learned counsel for the revenue supported the order passed by the Tribunal. 5. We have heard learned counsel for the parties. 6. The Tribunal while adjudicating the issue had solely relied upon the decision of the larger Bench of the Tribunal in Digamber Foundry v. CCE, Al .....

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) had held the judgment of the Larger Bench of the Tribunal in Digamber Foundry's case (supra) to be incorrect with the following observations:- 11. Thereafter, the Chandigarh Collectorate issued a trade notice on 25.7.1994 whereby the trade and all persons concerned were informed that the benefit of deemed credit on re-rollable material and ingots as provided in the deemed credit order was not admissible to the re-rolling units whose value of clearances was in excess of ₹ 75 lacs. Adm .....

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tice referred to above. The petitioner filed an appeal and the Commissioner allowed the appeal relying upon the decision of the Appellate Tribunal in the case of Collector of Central Excise, Coimbatore v. Sri Venkateswara Steel Industries - 1996 (86) E.L.T. 446 (Tribunal). This judgment of the Two Member Bench was reconsidered by a Three Member Bench of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) in the Dagambar Foundary versus Commissioner of Central Excise, Allahabad 2000 .....

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ble to any manufacturer whose total clearances in the preceding financial year did not exceed ₹ 2 crores. The deemed credit order clearly states that all concerns availing of exemption under Notification No. 1/93-C.E., dated 28.2.1993 will be deemed to have paid duty under Rule 57-I of the Rules and the credit may be allowed to them at the rate fixed without production of any documents evidencing the payment of duty. Any manufacturer whose total clearances did not exceed ₹ 2 crores w .....

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ut in Notification No. 1/93-C.E. and are availing of the benefit of the said notification. The trade note limiting this benefit to those manufacturers whose clearances do not exceed ₹ 75 lacs is totally illegal and against the deemed credit order issued by the Ministry. We may also point out that though the department may be bound by its trade note, the industry is not bound by the same and has a right to challenge the same. 8. The Madras High Court in the case of Ganesh Steels v. CESTAT, .....

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clearances not exceeding ₹ 75 lakhs, subject to various conditions and limitations as provided in that exemption Notification. The exemption under that Notification was not available if the aggregate value of clearances of all excisable goods for home consumption (a) by a manufacturer from one or more factories; or (b) from any factory by one or more manufacturers had exceeded ₹ 200 lakhs in the preceding financial year. Notification No. 1/93-C.E. Dated 28.2.1993 did not deal with a .....

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