Deemed credit to Ship-breakers, denial of - Instructions regarding - Central Excise - 77/77/94-CX

Deemed credit to Ship-breakers, denial of - Instructions regarding Circular No. 77/77/94-CX Dated 10-11-1994 [From F. No. 267/92/94-CX.8 (Pt.)] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Cutsoms, New Delhi Subject : Deemed credit to Ship-breakers, denial of - Instructions regarding. It has been brought to the notice of the Board that scrap generated by breaking of a ship etc. is not being allowed deemed Modvat credit by certain field formations. The ship-brakers have also represented to the Board. The matter has been examined and the following instructions are issued :- Rule 57G of the Central Excise Rules, 1944, stipulates that the Government has the power to allow deemed credit having regard to the period that has elapsed since the duty of excise was imposed on any inputs, the position of demand and supply of the said inputs in the country and any other relevant considerations. If no duty is imposed on any of the inputs then the provisions of Rule 57G cannot be invoked to allow deemed credit. Since the scrap cleared by the ship-breakers have not suffered the duty, it would not be correct to allow deemed credit on such scrap. 2. Suitable instructions may be issued to the field formations accordingly.