NATIONAL WINDER Vs. COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s National Winder, is whether the deemed Modvat Credit under Rule 57G(2) of the Central Excise Rules, is available to them in respect of the Aluminium Scrap.

(2.) Shri M.P. Devnath, learned Advocate submitted that the Appellant manufactured electric fans; that the Department had disallowed them the deemed Modvat Credit in respect of Aluminium Scrap on the ground that the scrap was in form of old, used and broken parts of machinery which was clearly recognisable as non duty paid; that in terms of the deemed credit Order issued by the Government of India, aluminium waste and scrap purchased from outside is deemed to have been duty paid; that as they have purchased the impugned scrap from the open market, it is deemed to be duty paid; that these are clearly stocks lying in the country not covered by the stocks lying in a factory, customs area or warehouse; that accordingly these inputs cannot be treated as being clearly recognisable as non duty paid; He also submitted that the inputs in question were originally metal gods which have suffered duty and hence the scrap is deemed as duty paid. Finally he submitted that no penalty is imposable on them as they had bonafide believed that the aluminium waste and scrap purchased from the open market is eligible for deemed MODVAT Credit.

(3.) COUNTERING the arguments, Shri Jagdish Singh, learned D.R., submitted that the Government has allowed the deemed Modvat Credit in respect of aluminium scrap under Order No. 341/1/88 -T.R.U., dated 12.7.90 subject to the conditions that the inputs should not be clearly recognisable as being non -duty paid or wholly exempted from duty or charged to nil rate of duty; that the Adjudicating Authority has given his specific findings in the Adjudication Order No. 14/94 -95 that the aluminium scrap was in the form of old, sued and broken machinery parts; that this fact has not been controverted by the Appellants; that such old, used broken machinery parts are clearly recognisable as non duty paid and no Modvat Credit is available to the Appellants. He relied upon the decision in the case of C.C.E. v. Electro Steel Casting Ltd., : 1999 (114) ELT 243(T).