ATE ENTERPRISES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) This is an appeal at the instance of the assessee challenging the order passed by the Commissioner of Central Excise, Ahmedabad dated 29 -9 -1997.

(2.) The appellant is engaged in the manufacture of textile machinery and parts thereof. One of the inputs was aluminium alloys/ingots. Under the various orders passed by the Central Government, deemed credit is provided on such aluminium alloys/ingots falling under Heading 76.01 of the Central Excise Tariff. Appellant had been purchasing aluminium alloys/ingots from M/s. Baheti Metal and Alloys Pvt. Ltd., Ahmedabad. The appellant was availing deemed credit on the aluminium ingots purchased from Baheti Metal. The present proceedings arise out a show cause notice dated 5 -8 -1993 proposing to deny the deemed credit taken by the appellant for the period 6 -6 -1988 to 20 -5 -1991. Apart from the arguments addressed on merits, the assessee contended before the Commissioner that the demand is barred by limitation. According to the assessee since it was not guilty of suppression of fact with intent to evade duty, the extended period of limitation cannot be applied in the present case. The Commissioner was not inclined to accept this contention. Aggrieved by the Commissioner's order, the assessee has come up in appeal.

(3.) The appellant submits that the goods purchased from M/s. Baheti Metal was received by the appellant under the challans and a commercial Bills. Since deemed credit was available on such goods, the appellant was availing the benefit of deemed credit on aluminium ingots purchased from M/s. Baheti Metal. The appellant had informed the department about these transactions, which were also duly entered with the Modvat register maintained by the appellant in Form R.G. 23A Part I and Part II. It is also submitted that a separate part was demarcated in RG. 23A for the above inputs on which deemed credit was availed by the appellant. Its challans under which inputs were received from M/s. Baheti Metal were entered in the Modvat Register. Full extracts of the register along with the challans received from M/s. Baheti Metal were filed with each monthly return. All such returns for the period in question were finally assessed by the competent Central Excise Officers without any objection regarding the appellant's availing deemed credit. It is further submitted that during the assessment of such challans several queries were raised from time to time which were replied by the appellant. Reference is made to a letter dated 6 -9 -1990 and a reply dated 12 -9 -1990 addressed to the Superintendent of Central Excise in respect of these transactions. It is also pointed out that the Assistant Commissioner of Central Excise, Division II, Ahmedabad had issued a show cause notice dated 15/18 -11 -1991 for the period May 1991 on the same allegation. The appellant had submitted its reply on 18 -12 -1991. Two years there after the present show cause notice dated 5 -8 -1993 is issued. In its reply to the show cause notice one of the contentions raised by the appellant was that the show cause notice is barred by limitation. This contention was not accepted by the Commissioner. He took the view that the appellant was fully aware that goods cleared by M/s. Baheti Metal and Alloys were cleared under exemption and therefore, the appellant was not entitled to a deemed Modvat credit. By suppressing the real facts, the appellant had deliberately taken the deemed Modvat credit for which they were not entitled to under the law. Therefore, invocation of larger period of limitation is justified. Aggrieved by the above finding, the appellant has come up in appeal both on merit as well as on the ground of limitation.