COMMISSIONER OF CENTRAL EXCISE Vs. MAHAJAN STEEL TUBES

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (for short, "the Act") against the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi dated 5.9.2008, Annexure A -5, proposing to raise following substantial question of law:

(2.) THE Assessee was governed by Compunded Levy Scheme under Section 3 of the Central Excise Act, 1944 (for short, "the Act") and was also availing benefits of deemed credit under Rule 57A(6) of the Central Excise Rules, 1944 read with notification dated 30.9.1997. The department noticed that inputs raised by the Assessee were purchased from a unit which itself was governed under Section 3A of the Act and had not paid ad valorem excise duty, on account of liability for payment of excise duty having been discharged under the Compounded Levy Scheme. Accordingly, Show Cause Notice was given for reversal of deemed credit and for penal action which was followed by Order -in -Original dated 29.12.2003 against the Assessee. On appeal, the said order was set aside vide Order -in -Appeal dated 30.9.2005 following judgment of this Court in Vikas Pipes v. CCE : (2003) 158 ELT 680 holding that where declaration is given by the supplier of goods that inputs had suffered excise duty, the remedy of the department is to proceed against the supplier for not having discharged duty liability and not against the person who used the inputs and claimed credit. The finding recorded in the Order -in -Appeal is as under:

(3.) WE have heard learned Counsel for the Appellant.