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TMI Blog1994 (7) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... but have emphasised that the rolling mills have purchased it from the market and after selecting re-rollable material out of it they had sold the melting scrap to them under their own invoices/bills. I am unable to agree with this contention of the appellants as the appellants had purchased the scrap from the rolling mills where scrap is generated out of the process of rolling of ingots/billets. Keeping this in view, I do not find any merit in the appeal of the appellants, I uphold the impugned order and reject the appeal of the appellants. 2. Briefly stated the facts of the case are that M/s Achal Alloys Pvt. Ltd. are manufacturers of steel ingots classifiable under Central Excise Tariff Chapter Heading No. 7206.00. The appellant opted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no evidence has been brought on record to prove that the scrap was non-duty paid; that Bombay High Court in the case of Vapson Products, Bombay v. UOI reported in 1987 (27) E.L.T. 608 (Bom.) = 1988 (15) ECR 138 had held : Apart from the presumption which arises in favour of the petitioners, the petitioners have produced before the Department documents to substantiate their claim that duty was paid on the base dyes purchased from the open market. The petitioners have produced invoices in respect of the purchase and that was the requirement prescribed by the Collector of Central Excise by publication of trade notice dated 25-11-1961. The trade notice, inter alia, mentions : Such manufacturerrs should produce to the Central Excise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-ponderance of the ratio of the judgments cited by him and relied upon, the impugned order may be set aside. 4. Shri B.D. Bhagat, the ld. JDR appearing for the respondent submitted that the appellant had purchased the rolling scrap from Rolling Mills; that this scrap was either generated or purchased by Rolling Mills on payment of nil duty; that this fact is clearly stated in the Show Cause notice. Thus, it was not necessary to prove further that the goods were recognisable as non-duty paid. He submitted that modvat credit even in the form of deemed credit as a matter of policy is the refund of duty actually paid on the goods; that in the scheme of deemed credit duty is supposed to be paid first and then deemed credit becomes available. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area of interpretation with regard to the following provisions in the order :- If such inputs are clearly recognisable as being non-duty paid or charged to nil rate of duty. It is not the case of the department that the goods have been removed from Excise or Customs area without payment of duty and hence they are to be construed as non-duty paid. The department states that the goods have been supplied by a manufacturer, who is entitled to avail of the exemption legally extended under Notification No. 208/83. In view of this position, the goods cleared, availing of exemption legitimately available to the manufacturer, cannot be construed to be non-duty paid. They are to be considered as goods having been legally cleared availing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Govt. of India in its later order dated 20-5-1988 specifically referred to goods wholly exempted from duty as not eligible for deemed modvat credit. The relevant portion of the order of the Govt. of India No. 342/10/88-TRU dated 2-5-1988 is reproduced below :- No such credit shall, however, be allowed - (i)... ... ... (ii) if such inputs are clearly recognisable as being non-duty paid or wholly exempt from duty or charged to nil rate of duty." 11. This later order of the Govt. of India itself brings out the distinction between the goods, wholly exempted from duty vis-a-vis those goods charged to Nil rate of duty. In view of the fact that the inputs in respect of which deemed credit is sought to be denied during the period 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended. We, therefore, allow all the four appeals with consequential relief." 7. I have carefully considered the submissions made by both sides and the case law cited and relied upon by them. On the one side there is the judgment of the Tribunal in the case of Arun Auto Spring cited supra which distinguishes the non-duty paid character of the goods observing that the goods cleared availing of exemption legitimately available to the manufacturer, cannot be construed to be non-duty paid whereas in the case of Capson Electro Stampings, it was observed by the Tribunal that it is for the department to produce sufficient evidence whatsoever that the M.S. sheets purchased by the appellant are non-duty paid or charged to nil rate of duty. 8. Dee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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