1997 (7) TMI 596 - AT - Central Excise

Summary

Issues:
- Denial of benefit of deem credit order for brass scraps
- Contravention of Rule 57G(2) of Central Excise Rules, 1944
- Applicability of previous Tribunal decision on similar case
- Interpretation of Trade Notice No. 19/93 by the Collectorate of Kanpur
- Lack of evidence to prove duty paid on brass scrap
- Dismissal of appeal based on recognition of scrap as non-duty paid goods

Analysis:
The appellant filed an appeal against the denial of the benefit of deem credit order for brass scraps in the impugned order. The issue arose when the brass scrap generated from unserviceable household articles and machinery parts was considered non-duty payable, leading to the denial of Modvat credit. The appellant, engaged in manufacturing taps and cocks, availed the credit during a specific period but faced a Show Cause Notice alleging contravention of Rule 57G(2) of Central Excise Rules, 1944. The appellant's claim was based on a previous Tribunal decision in a similar case, asserting entitlement to the credit under a specific order.

The Department, represented by the SDR, argued that the appellant failed to provide evidence of duty payment on the brass scrap. They relied on Trade Notice No. 19/93 issued by the Collectorate of Kanpur, which clarified that certain types of scrap, including broken machinery parts, were recognizable as non-duty paid goods. The Department contended that the appellant's claim was based on scrap not generated through conscious manufacturing activities, leading to the dismissal of the appeal.

In the judgment, it was highlighted that the Show Cause Notice did not specifically mention the appellant availing credit on broken machinery parts or similar items. The Tribunal referred to a previous decision where lack of documentary evidence regarding the nature of the scrap led to the rejection of the Department's assumptions. The Tribunal emphasized that the burden of proof lay with the Department to disprove the appellant's claim under the deemed credit order. The judgment concluded that the impugned order was set aside, and the appeal was allowed based on the applicable precedent and lack of evidence supporting the recognition of the scrap as non-duty paid goods.