9911796707
TMI Blog1989 (3) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... Scrap of Aluminum and unwrought Copper which they had availed in terms of the direction of the Government of India dated 7-4-1986 issued under Rule 57G(2) of the Central Excise Rules, 1944. The amount of MODVAT credit which the appellants were asked to reverse on this ground was Rs. 1,62,321.52. 2. The appellants are engaged in the manufacture of machined and unmachined Copper-base Alloy castings and components falling under various sub-headings of the Central Excise Tariff Act, 1985. They used unwrought copper and waste and scrap of Copper and Scrap of Aluminum as inputs in the manufacture of the final products mentioned above. They opted for MODVAT with effect from 11-6-1986 after filing the requisite declaration under Rule 57G on 5-6- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 149/86 in respect of unwrought Copper and pointed out that in these Notifications themselves there is an Explanation that for the purposes of the Notification all stocks of copper and products thereof and aluminum and products thereof shall be deemed to be duty paid. Therefore, it cannot be held, as has been done by the Department, that because of these exemption Notifications, the inputs utilised by the appellants are non-duty paid and therefore, ineligible for deemed credit. The learned Counsel pointed out that it is for the Department to show that as to how the goods are identifiable as non-duty paid because the appellants had purchased these materials from the open market. He also relied upon the decision of the North Regional Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly non-duty paid. 5. We have given careful consideration to the submissions made by the learned Counsel and the learned S.D.R. The essential condition for taking credit of input duty under the MODVAT scheme is that the receipt of the inputs into the manufacturer s factory must be accompanied by documents evidencing payment of duty on the inputs. But under Rule 57G(2) the Government have the power in certain special circumstances to issue a direction to consider certain inputs as deemed to be duty paid unless inter alia they are shown to be clearly recognisable as non-duty paid and on such materials MODVAT credit can be taken without production of documents evidencing payment of duty. The order dated 5-7-1986 of the Government specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unwrought copper because in this Notification, there are certain conditions for availing of exemption relating to unwrought copper whether proforma credit or MODVAT credit have been availed or not, and also laying down that it shall not apply to copper and articles thereof produced or manufactured by a primary producer. Therefore, in respect of waste of copper and waste of Aluminum, the exemption is total and unconditional, and in such a circumstance, the Department will be within its right to hold that these are clearly recognisable as non-duty paid and deny deemed credit thereon. On the other hand, the exemption on unwrought copper is conditional, and the Department cannot deny deemed credit unless it is able to establish by enquiries th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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