INDIA PISTONS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This civil miscellaneous appeal, filed at the instance of the assessee, was admitted by this Court on the following substantial questions of law:

(2.) It is seen from the facts that the appellant herein is a manufacturer of automobile pistons, gudgeon pins and piston rings from unwrought aluminium alloy ingots, unwrought aluminium ingots, unwrought aluminium castings procured from smelters, who manufactured the same from the duty paid aluminium. The assessee availed of MODVAT credit on imports such as aluminium ingots, aluminium castings, aluminium alloy ingots etc., in terms of Sub Rule (2) of Rule 57(G) of the Central Excise Rules, 1944.

(3.) It was noticed that during the period 1.3.1988 to 12.9.1998, the appellant/assessee had availed deemed credit to the extent of Rs.10,37,337.48 on aluminium alloy ingots. As per the Government Order F.No.342/1/88-TRV dated 20.5.1988, deemed credit was not available on aluminium alloys ingots, if such ingots were recognisable as being non-duty paid or wholly exempted from duty or charged to nil rate of duty. It was pointed out that the aluminium alloy ingots were manufactured by the manufacturer out of the duty paid unwrought aluminium falling under Chapter 76 and were exempted vide notification No.100/88. Thus, the assessee was not eligible for deemed credit for the above-said inputs from 1.3.1988. On appeal, the Collector (Appeals), allowed the claim of the assessee, holding that the exemption under the notification was only conditional and there was no evidence from the side of the Revenue to show that the aluminium ingots were manufactured out of non-duty paid goods. Thus, by order dated 15.12.1989, the Collector set aside the order of the Assistant Collector dated 3.3.1989, holding that the assessee was entitled to avail the deemed credit on the aluminium alloy ingots during the period 1.3.1988 to 19.5.1988, as there was no condition on payment of duty on the ingots as per F.No.332/30/87/TRU dated 2.11.1988 and hence directed restoration of the credit. As regards the deemed credit from 20.5.1988, exemption under Notification No.100/88 was conditional and yet, there was no evidence that the ingots were manufactured from out of non-duty paid goods. Thus, for the period 20.5.1988 to 12.9.1988, the matter was remanded for de novo enquiry.