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1990 (12) TMI 227 - AT - Central Excise
Issues:
Interpretation of modvat scheme provisions regarding deemed credit for inputs wholly exempted from duty conditionally. Analysis: The legal issue in the appeals was whether the respondents were entitled to the benefit of the modvat scheme for inputs wholly exempted from duty conditionally. The department argued that since the inputs were wholly exempted from duty, the onus was on the assessees to prove that excise duty had been paid on these goods to claim modvat credit. The department contended that duty paying documents were not produced, and therefore, the benefit of deemed credit was not admissible as per relevant orders and provisions. The respondents, on the other hand, argued that various Tribunal orders had held that if goods were conditionally exempted, it could not be presumed that they were not duty paid. They emphasized that the purpose of the deemed credit scheme would be defeated if the benefit was not extended in such cases. They also highlighted that the goods in the open market were deemed to be duty paid unless proven otherwise, citing relevant case law and notifications. The Tribunal considered both arguments and found that the issues were already covered by previous Tribunal orders cited by the respondents. The department failed to provide any new grounds or legal precedents to support their viewpoint. The Tribunal noted that even the order from the South Regional Bench did not fully support the department's position. Additionally, the amendment to the relevant order, which clarified the position, was not applicable to the period in question. Ultimately, the Tribunal dismissed the appeals and upheld the orders of the Collector (Appeals) based on the precedent set by the WRB and NRB. The Tribunal concluded that the department had not presented sufficient grounds to warrant a different decision, and therefore, the benefit of deemed credit under the modvat scheme was to be extended to the respondents for inputs conditionally exempted from duty.
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