2000 (7) TMI 515 - AT - Central Excise

Summary

Issues:
Claim for refund of duty amount under Notification No. 202/88 - Duty paid nature of purchased scrap - Entitlement to deemed credit under Modvat scheme.

Analysis:
The appeal was filed against the Collector (Appeals) order that reversed the order-in-original allowing the refund of duty amount to the appellants. The appellants, manufacturers of iron and steel bars, purchased scrap from a supplier and cleared final products without paying duty. The Assistant Collector initially allowed the refund, citing the scrap as duty paid under Notification No. 202/88. However, the Collector (Appeals) reversed this decision, stating the scrap's duty paid nature was not proven, hence denying the benefit of the notification and deemed Modvat credit.

The appellants contended that the scrap purchased should be presumed duty paid, making them eligible for Notification No. 202/88 or deemed Modvat credit. Conversely, the Respondents argued that without proof of duty payment on the scrap, the benefits were rightly denied by the Collector (Appeals). The Tribunal examined the case and found no evidence proving the duty paid status of the purchased scrap, as the bills and gate passes lacked duty payment particulars. Therefore, the Collector (Appeals) correctly reversed the Assistant Collector's decision based on erroneous presumption.

Regarding the deemed credit under the Modvat scheme, the Tribunal upheld the Collector (Appeals) decision to disallow it due to the appellants' failure to establish the duty paid status of the purchased scrap. The absence of duty payment details on supplier documents further supported the denial of deemed credit. Consequently, the Tribunal deemed the Collector (Appeals) order valid and dismissed the appeal, as the appellants failed to prove the duty paid nature of the purchased scrap essential for claiming benefits under Notification No. 202/88 or the Modvat scheme.