1992 (6) TMI 138 - AT - Central Excise

Summary

Issues:
1. Denial of deemed Modvat Credit for aluminium scrap.
2. Interpretation of exemption notifications.
3. Burden of proof on the Department regarding duty status of inputs.

Analysis:
1. The appeal was against the Collector (Appeals) order allowing the Respondents' appeal and setting aside the Assistant Collector's decision to deny deemed Modvat Credit for aluminium scrap. The Respondents claimed the credit based on a statutory order, but the Assistant Collector found the scrap to be exempted under Notification No. 182/84. The Collector (Appeals) considered the conditional nature of the notification and ruled in favor of the Respondents, leading to the Revenue's appeal before the Tribunal.

2. The Revenue argued that pulgaon scrap was ammunition scrap exempted under another notification, while the Respondents contended that the burden of proof lay on the Department to show non-duty paid status. Referring to case law, the Revenue sought to set aside the Collector (Appeals) order, emphasizing the need for the Respondents to establish duty payment for the scrap to claim deemed credit.

3. After hearing both sides, the Tribunal noted that the aluminium scrap was purchased from the market under invoices, with the statutory order allowing deemed credit for such purchases. The Department alleged non-duty paid status, but the Tribunal emphasized the need for the Department to prove this claim. The Tribunal upheld the Collector (Appeals) decision, highlighting the requirement for evidence to show inputs were from manufacturers availing exemption. As no such evidence was presented, the Tribunal rejected the Revenue's appeal, affirming the Collector (Appeals) order.

This detailed analysis covers the issues of denial of deemed Modvat Credit, interpretation of exemption notifications, and the burden of proof on the Department, providing a comprehensive understanding of the judgment delivered by the Tribunal.