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Issues:
1. Wrong availment of deemed Modvat credit on aluminium alloy ingots. 2. Whether the suppliers' actions amount to manufacture. 3. Justification for denial of deemed Modvat credit. 4. Validity of penalty imposed on the appellants. Analysis: 1. The appellants, manufacturers of electric fans, were accused of wrongly availing deemed Modvat credit on aluminium alloy ingots. The department alleged that the suppliers of the ingots had not paid duty, making the materials non-duty paid and ineligible for deemed credit under Rule 57G(2). The Assistant Commissioner confirmed the demand and imposed a penalty on the appellants, leading to the present appeal. 2. The appellants argued that the suppliers were processors and their actions did not amount to manufacture. They relied on a Tribunal decision stating that the department must investigate if goods cleared under a conditional exemption have met the conditions before denying deemed credit. The appellants cited Notification No. 180/88, similar to the one in the Tribunal decision, to support their case for remand. 3. The Departmental Representative contended that sufficient evidence showed the ingots had not suffered duty, justifying the denial of deemed Modvat credit without further investigation. The show cause notice indicated that the ingots were exempted from Central Excise duties, based on the suppliers' endorsements on the delivery challans. 4. The tribunal found merit in the Departmental Representative's argument, as the endorsements on the challans indicated the ingots had not incurred duty. Therefore, the denial of deemed credit was upheld. However, considering the contradictory Tribunal decisions on the matter, the penalty imposed on the appellants was deemed unjustified and set aside. The appeal was disposed of accordingly.
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