9911796707
TMI Blog1996 (10) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... at in their declaration under Rule 57G for Modvat purposes, the appellants had declared unwrought Zinc as one of their inputs. It is found that between 5-3-1991 to 30-8-1992, the appellants had received certain quantities of zinc ingots and took deemed credit thereof amounting to Rs. 99,898/-. The deemed Modvat credit is taken in pursuance of the order of the Government of India under Rule 57G, which is by way of exception to the requirement under the Modvat Rules that input duty credit can be taken only when such inputs are received under cover of document evidencing payment of duty. In respect of notified inputs, duty can be taken without production of such duty paid document. The department conducted enquiry relating to the supplies of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur passed the impugned order dated 28-12-1993 ordering recovery of the duty in question under Rule 57-I of the Central Excise Rules and also imposing a penalty of Rs. 10,000/- on the appellants herein under Rule 173Q of the Central Excise Rules. 2. Shri G.L. Deshpande, the ld. Counsel for the appellants, submitted that the demand raised by the department invoking the longer period under Rule 57-I alleging suppression of facts by the appellants, is bad in law. The appellants herein have not suppressed any facts from the department. The concerned invoices for the receipt of the inputs on which deemed credit had been taken by them have been produced to the Department, which have been duly defaced. Some of the invoices are on record which s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing - 1990 (49) E.L.T. 23 to the effect that the assessee should clearly establish the duty paid nature of the input for claiming the deemed Modvat credit. 4. The submissions made by both the sides have been carefully considered. The issue is, whether the order for reversal of Modvat credit under Rule 57-I invoking the longer period in the facts of this case, is correct in law or not? As indicated above, the appellants were availing of deemed Modvat credit, which is an exception to the general rule of Modvat Scheme and allows the manufacturer to take Modvat credit on the inputs covered by the Government of India s order without insisting on producing documents evidencing payment of duty. But at the same time, such facility can be denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered duty so as to justify taking deemed Modvat credit in terms of the Government of India s order, since they were claiming such deemed credit which also contained a bar to that credit where the inputs are clearly recognisable as non duty pad. A plea had been taken in reply to the show cause notice by the appellants that the invoices of M/s. Kothari Products only show that they were manufacturers of brass/copper cold rolled sheets and therefore it was presumed that they were not manufacturers of zinc ingots. However, a perusal of the invoice of Kothari Products No. 60/92-93 dated 22-6-1992 shows that they are described therein as manufacturers of non ferrous metals and brass/copper cold rolled sheets. So this plea taken does not have muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to take deemed Modvat credit and secondly to the department. But the appellants had to make enquiries, it was something which they must have done viz. to ascertain that the inputs covered by those invoices had suffered duty. The appellants had not done so but had taken deemed Modvat credit on these inputs all the same. In such a context, it was not something the appellants might have done, but something the appellants must have done, before taking the deemed Modvat credit. Since they have failed to do so, it can reasonably be held that the department was justified in alleging suppression of facts by the appellants. Therefore, the order of the Commissioner reversing the Modvat credit taken on the inputs, is correct in law. The appeal is r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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