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TMI Blog1988 (6) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly taken by them in their RG-23A Part II. The amount was subsequently reduced to Rs. 6,01,653.20 by a corrigendum under F. No. Peico/S-l/SCN, dated 4-7-1987. The Assistant Collector had also imposed a penalty of Rs. 500/- on the appellants. 2. The appellants stay petition was decided by the undersigned under F. No. V-2(72) 1786/87, dated 25-2-1988. In my order I had observed that no cash payment was made by the appellants and hence the reversal as asked by the Assistant Collector will not amount to a financial hardship to the appellants. In short, the application for stay was rejected. Thereafter, the counsel for the appellants Shri N.D. Khosla called on me on 11.3.1988 and submitted another stay application, dated 2.3.1988 and pleaded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larified various points. Shri Khosla pleaded that the appeal involved the following issues: "1. Whether the appellants who had availed of the deemed Modvat credit on the iron steel scrap purchased form the market under the earlier order F. No. B-22/5/86-TRU, dated 7-4-1986 of the Government during the period from 1.3.1986 to 29.8.1986,were liable to reverse the credit on the ground that the Government had withdrawn the said credit vide its subsequent order dated 29.8.1986. 2. Whether the order of the learned Assistant Collector, invoking the condition in the condition in the aforesaid orders of the learned Government that "such inputs are clearly recongnisable as being non-duty paid or charged to nil rate of duty correct, legal and proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty to whom the promise or representation is made and it is in fact so acted upon the other party, the promise or representation would be binding on the party, making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings which have taken place between the parties." 4. Regarding the issue 2, Shri Khosla, pleaded that this ground does not find mention in the show cause notice and, therefore, was not sustainable in law. In this connection he cited the following case laws :- (a) The learned CEGAT Special Bench 'D', in the case of Collector of Central Excise, Bombay v. Voltas has ruled that adjudication order based on a different footing from that given and admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ECR 177. 5. Shri Khosla produced a copy of the order and pleaded that by this token the scrap purchased by them from the market is presumed to be duty paid and that the onus of proving that it was not so was squarely on the Department. (ii) The learned High Court of Delhi, in the famous case of Sulekh Ram v. U.O.I. - 1978 E.L.T. (J535). The relevant extract of the order is reporduced below : "It would be intolerable if the purchasers of manufactured goods were to be required to ascertain whether excise duty on the manufactured goods had already been paid by the manufacturer before the sale of such good or not. Purchaser would have no means of knowing it. Hundreds and thousands of purchasers of such goods are made and in no case can any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the show cause notice that the waste or scrap on which the appellants took credit were recognisable as non-duty paid. Therefore, a sweeping finding to that effect in the impugned order was not maintainable in law. It is a well settled principle that the effected person/or the taxpayer must be given adequate opportunity to defend his case which in the instant case, unfortunately was not observed. Nevertheless, the issue relating to deemed credit having been previously decided by this office, in similar cases, I proceed to decide this case instead of remanding the same to the lower authority for de novo adjudication. It is important to note that the question of permitting deemed credit in respect of certain inputs, even though duty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed credit. It is also seen from the Audit Report No. 627/86 issued from File No. 111/4-627/A/86, dated 14.12.1986, that the Audit party has raised an objection for the deemed credit availed of by the appellants for the period from 29-8-1986 i.e. from the issue of Ministry's letter F. No. B. 22/30/86-TRU, dated 29.8.1986, evidently, because no evidence had come on record relating to scraps received by the appellants being clearly recognisable as non-duty paid. It is also well settled by judicial pronouncements that the Govt. of India's policy cannot be questioned and, benefit of such policy dented on any supposed intention. The appellants are, therefore, entitled to avail of the concession of deemed credit upto 28.8.1986 only. However, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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