ARVIND STEEL AND AGRO INDS. Vs. CCE

JUDGEMENT

(1.) Heard both sides and perused records. Even though the case is posted today only for consideration of stay applications, since the issue remains settled by the order of the Hon'ble High Court of Punjab and Haryana and the orders of this Tribunal, it is appropriate that appeals themselves be taken up for consideration. Accordingly, after dispensing with the requirement of pre -deposit, I taken up for considering the appeals.

(2.) The issue that arises for consideration is whether the appellants who are re -rollers of "Iron and Steel" were eligible for deemed credit in terms of Notification No. 58/97 in respect of inputs purchased by them from manufacturers of Iron and Steel who discharged duty liability under Section 3A (Compounded Levy) of the Central Excise Act. The manufacturers who obtained inputs from such suppliers were eligible for deemed credit under the Notification No. 58/97. The only requirements under the notification were that the purchase must be directly from a manufacturer who discharged duty under Section 3A and that the invoice contained a declaration that appropriate duty has been discharged. In the present case, credit has been denied on the ground that the supplier, manufacturer had not paid full duty liability as determined by the Commissioner. However, it is noted that duty has been paid under Section 3A. The contention of the learned Counsel is that such a dispute about the quantum of duty, in no way, affected the claim for Modvat Credit inasmuch as it remains settled [Vikas Pipe v. Commissioner of Central Excise, Chandigarh -II, 2003 (158) ELT 680 (P&H)] that once there is a certificate about payment of duty under Section 3A, it is not for the buyer of the inputs to go into the correctness or otherwise of amount of duty paid. The learned Counsel for the appellant submitted that in several similar cases this Tribunal also has held that dispute about the quantum of duty between the supplier and Revenue is no ground for denying credit to the input purchaser.

(3.) The appellants claim remains covered by the aforesaid decision of the Punjab and Haryana High Court and the decisions of this Tribunal. The deemed Modvat Credit given under Notification No. 58/97 is at a flat rate of 12% of the value of the purchased inputs. It is, in no way, dependent upon the amount of duty paid and the correctness of that amount. Denial of credit in the present cases is not sustainable. The impugned order is set aside and the appeals are allowed with consequential relief to the appellant.