9911796707
TMI Blog1999 (10) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged that the appellants had short paid Central Excise duty amounting to Rs. 2,85,110/- (Rs. two lakhs eighty five thousand one hundred and ten only) while clearing certain inputs imported by them earlier and after availing Modvat credit. In their reply dated 26-12-1995 to the SCN appellants stated that they were agreeable to the contents of the SCN. They also informed the Deputy Commissioner that they have raised an invoice for Rs. 2,85,110/- and had also debited their RG 23A Part II account for the said amount. They also requested that the SCN may be treated as closed. The matter was however adjudicated by the Deputy Commissioner. By his Order-in-Original dated 31-12-1997, Dy. Commissioner upheld and confirmed in full, the duty demand o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken by a manufacturer but had been removed subsequently for home consumption under Rule 57F (1)(ii) of the Central Excise Rules would be the duty suffered earlier and not the 'effective rate of duty prevalent at the time of removal of goods for home consumption. This decision has been followed by the Tribunal in a further decision in SKF Bearings India Ltd. v. CCE Bangalore [1999 (33) RLT 92 (CEGAT)], in which also it was held that only the duty amount equal to the credit taken in respect of inputs need to be reversed under Rule 57F (1) (ii) of the Central Excise Rules. Ld. Counsel explained that the appellants, while importing the ball bearings had paid customs duty at the rate of 10% and had taken Modvat credit to that extent. Subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the credit already taken. Ld. Counsel therefore pleaded for setting aside the Order-in-Appeal. 7. Ld. JDR defending the impugned order submits that the appellant's letter dated 26-12-1995 in reply to the SCN was a clear admission of the fact that there was a short payment of duty to the extent of Rs. 2,85,110/-. The appellants had also debited the said amount pursuant to the SCN. There was therefore no question of their not being liable to penalty under Rule 173Q. As regards reliance placed by the appellants on the Larger Bench decision in the American Auto Service case (supra), the ld. JDR submitted that the Supreme Court decision in Union of India v. Jalyan Udyog [1993 (68) E.L.T. 9 (S.C.)] has clearly held that where a legal ficti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department had arisen only at the stage when appellants had subsequently removed the inputs pursuant a sale to their sister concern. Rule 57F (1)(ii) as it stood at the relevant time was examined and interpreted by the Larger Bench decision in American Auto Service case (supra) and it was held that by a legal fiction Rule 57F (1)(ii) had placed a burden on the user to make the payment of duty as if he was the manufacturer. By the fiction the user of the inputs was deemed to be a manufacturer for purpose of recovery of credit already utilised by him on such inputs. The requirement for payment of duty on the inputs removed for home consumption at the stage of removal was to be the duty which it had suffered. Even if the duty had been r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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