1994 (1) TMI 158 - AT - Central Excise

Summary

Issues:
- Disallowance of Modvat credit by Collector of Central Excise
- Admissibility of Modvat credit on Zinc and Zinc articles
- Enquiry regarding non-duty paid Zinc Alloy Ingots
- Applicability of Deemed Credit Order
- Legal entitlement to Modvat credit on Zinc purchased from job workers

Analysis:
The appeal was filed against the Collector of Central Excise's order disallowing Modvat credit amounting to Rs. 71,427.60. The show cause notice alleged contravention of Central Excise Rules regarding the credit of duty under Modvat Scheme on Zinc and Zinc articles. The Department contended that Zinc purchased from suppliers was non-duty paid, leading to the disallowance of Modvat credit.

The Department specifically alleged that Zinc Alloy Ingots supplied by M/s. Century Aluminium Manufacturing Company Ltd. were non-duty paid. The appellants did not dispute this fact in their reply to the show cause notice. The Tribunal held that it was not necessary for the Department to provide a copy of the enquiry report to the appellants. Citing a Supreme Court decision, the Tribunal emphasized that the substance of documents should be furnished, and the failure to request the report indicated no prejudice to the appellants.

Regarding the Zinc Alloy Ingots, the Tribunal concluded that the credit taken by the appellants was not in accordance with the law as the ingots were non-duty paid. However, with respect to the Zinc purchased from job workers, M/s. Capso Engineers, the Department failed to establish that they were non-duty paid. As there was no evidence or enquiry indicating non-duty paid status, the appellants were held entitled to the Modvat credit under the Deemed Credit Order.

The Tribunal partially allowed the appeal, ruling that the Modvat credit on Zinc purchased from M/s. Capso Engineers was legally allowable, setting aside the demand of duty in this regard. However, the credit on Zinc Thimbles and Zinc Alloy Ingots was disallowed, confirming the demand for duty on these items. The appellants had already deposited the confirmed amount, and the rest of the demand was set aside, partially allowing the appeal in the specified terms.