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TMI Blog2003 (6) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Assistant Commissioner of Central Excise, Daman. The Assistant Collector of Central Excise DAMAN Sub : MODVAT CREDIT Dear Sir, Kindly permit us to introduce ourselves as the manufacturers of Lead and Lead Alloys which is falling under Chapter 78 of Central Excise Tariff. We commenced our production after getting the permission of Central Pollution Control Board on 15-10-92. As ours is a secondary lead plant, the basic raw materials are Lead Scrap and Lead Waste. They are procured both indegeniously as well as imported from various other countries. As far as imported raw material is concerned, we are paying countervailing duty of Rs. 2,200/- per MT. Similarly in case of indegenious raw material we are entitled to avail deemed credit of Rs. 2,100 per MT as per Notification F.No. 342/1/88, dated 12-7-90. At the time of commencement of the plant we had got in touch with the then Assistant Collector of Central Excise, Vapi under whom our Range was falling at that time and had informed him that we intend taking full Modvat credit of Rs. 2,100 per MT on deemed basis on indegenious raw materials. The Assistant Collector allowed us provisional credit upto value of Rs. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed credit on actual weight i.e. net weight of lead you have availed credit on gross weight i.e. weight of plastic materials which is incorrect. Your finished goods is refined lead and plastic materials are not input undergoing manufacturing or your finished goods and in no case the plastic materials are used in or in relation to the manufacture of finished goods nor a raw material/inputs as provided in Rule 57A of C. Ex. Rules, 1944. Therefore the credit availed on such gross weight is incorrect. You are therefore requested to intimate the actual quantity of lead obtained consignment wise from beginning till end of Sept. 92 and weight of plastic materials obtained from such inputs and reverse credit equivalent at the rate of credit availed and report the payment particulars. You are hereby requested that henceforth when you receive such inputs first you obtain lead from such scrap on such actual weight of lead deemed credit to be availed minus the weight of plastic materials. In RG23A Part I also you should take credit on net weight of lead only and not along with plastic materials. No credit to be availed on gross weight containing plastic materials. Such repetition wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ap generated in a factory and cleared after payment of duty on scrap itself. He further stated that details of such scrap will be submitted in a couple of days in this respect. Whereas it also appears that a statement of Shri M.J. Patel, Personnal and Administrative Manager of the assessee was recorded under Section 14 of the Central Excises and Salt Act, 1944 on 4-12-92 by the Superintendent of Central Excise, Division Daman, wherein he inter alia stated that as already stated in his earlier statement dated 1-11-92 there inputs viz. 1. Drained battery purchased from Traders, 2. Lead scrap obtained from drained battery purchased from Traders, and 3. Unwrought ingots of lead and further stated that they are also availing deemed Modvat credit on lead cable sheeting, and given detailed worksheet of the receipt No. RPPM:MD:92:121, dated 30-11-92. Accordingly, they have taken the deemed Modvat credit as detailed below : Period Deemed credit availed (Rs.) 1. Whole drain battery (containing lead) Dec. 91 to Oct. 92 4,79,715.00 2. Lead scrap Dec. 91 to Oct. 92 12,93,321.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent of Central Eixcise, Daman on 3-12-92, wherein he stated that they are the manufacturers of lead ingots having their factory situated at A-2/2303, GIDC, Sarigam. They are purchasing raw materials like lead furnace ash and lead ash by imports as well as by local purchase and after doing the manufacturing activities. He further stated that they are availing the benefit of exemption from payment of central excise duty as per Notification No. 37/81, dated 8-3-81 ........................ 5. The assessee resisted the claim, stating that in January, 1992 they have already informed the department and also the department, when they raised their objection in October, 1992, had not specifically raised its objection regarding unwrought lead and therefore the recovery of Modvat credit, alleging that they have wrongly availed, is wrong in law. It is also pointed out by the assessee that the claim is barred by limitation since the entire transaction by the assessee is known to the department. RT12 returns for the respective months have been filed in due time and they have been assessed. The delivery challans were also enclosed. The adjudicating authority, after hearing the parties, disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers the invocation of the larger period. As far as reference to the order dated 12-7-1990 is concerned, it is submitted by the learned SDR that production of documents regarding evidence of payment of duty was only waived and it does not mean that where no duty has been paid in fact a person could not take the deemed credit. He asked the question that the credit of whatever duty, namely zero could be taken. Without payment of duty, there cannot be any credit taken. 7. I have considered the interesting arguments made by both sides. When I go through the document i.e. the letters dated 27-1-1992 and 8-10-1992, I am inclined to agree with the argument made by the learned SDR. The party has miserably failed to prove the payment of duty at input stage. It is no doubt true that when one normally purchases the goods from the market, it is assumed that duty would have been paid. It is assumed that all persons including the manufacturers would abide by law in paying the duty regularly. But when the fact remains that in this case, a specific order has been made on the delivery challans by the proper authority, nothing prevented the party from filing an appeal against the same, as it amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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