COMMISSIONER OF C. EX. Vs. RUBICON STEELS

JUDGEMENT

(1.) In this Appeal filed by the Revenue, the issue involved is whether deemed credit is available to the respondents M/s. Rubicon Steels under Notification No. 58/97 -Central Excise, dated 30 -8 -97.

(2.) Shri H.C. Verma, learned Departmental Representative submitted that the respondents manufacture rail coach parts and availed of the Modvat credit of duty paid on the inputs; that during the scrutiny of RT 12 returns during the period from 4/98 to 3/99, it was found that they had availed deemed Modvat credit on the strength of invoice in which it was mentioned that duty liability was to be discharged under Rule 96ZP(3) of the Central Excise Rules; that in terms of Para 4 of Notification No. 58/97, the Deputy Commissioner under Adjudication Order Nos. 286 -88/99, dated 1 -12 -99 disallowed the Modvat credit; that on Appeal however, the Commissioner (Appeals) allowed the Appeal partly by allowing the deemed Modvat credit in respect of the inputs where the Range Officer of the supplier had certified the payment of Central Excise duty on the inputs; that on inquiry the Central Excise Division, Mandi Govindgarh in whose jurisdiction the suppliers were falling have confirmed that M/s. Quality Steels and M/s. Guru Arjun Iron and Steel Rolling Mills and M/s. Gopal Mills have not discharged their duty liability as determined by the Commissioner Chandigarh; that as the supplier had not discharged the appropriate duty liability, the deemed Modvat credit is not admissible to the respondents.

(3.) On the other hand, Shri Ajay Jain, learned Advocate, submitted that Para 2 of the Notification No. 58/97 provides that duty of excise shall be deemed to have been paid on the inputs specified in the Notification and the same shall be equivalent to the amount calculated at the rate of twelve per cent, of the price and credit of deemed duty so determined shall be allowed to the manufacturer of the final product; that under this Para, the respondents are eligible to avail of deemed Modvat credit. He further submitted that no proof has been brought on record by the Revenue; that the Certificate issued by Range Superintendent regarding payment of duty was not correct. Finally he relied upon the decision in the case of CCE, Jaipur -I v. Runthala Industries [2002 (101) ECR 71 (Tri.)] wherein the Tribunal allowed the deemed credit under the Notification No. 58/97 as the duty had been paid on the goods supplied to the respondents therein. He, therefore, contended that it is not necessary that the entire duty should be paid before the deemed credit under the said Notification can be availed of.