CCE Vs. MUZAFFARNAGAR PIPE IND.

JUDGEMENT

(1.) Examined the records and heard both the sides. Deemed modvat credits totalling to Rs. 5,59,280/ - were denied to the respondents by the original authority and a penalty of Rs. 30,000/ - was imposed on them by that authority. That was on the ground that he input -supplier has not discharged duty liability in full in respect of the inputs on which the deemed credits were taken by the respondents and therefore, the conditions set out in Notification No 58/97 -CE dated 30.8.97 had not been fulfilled. The appeal preferred by the party against the decision of the original authority was allowed by the Commissioner (Appeals). Hence the present appeal of the Revenue.

(2.) The deemed credits were taken on the strength of invoices which were issued by the inpute -manufacturers working under the Compounded Levy Scheme of Rule 96 -ZP of the Central Excise Rules. 1944 read with Section 3 -A of the Central excise Act. All the invoice contained declaration to the effect that duty liability had been discharged under Rule 96 -ZP(3) read with Section 3 -A. The short question which arised in this appeal is whether apart from the above deceleration by the input -supplier, anything more required to be done by the respondent to be eligible for deemed Modvat credit in respect of the inputs covered by the invoices. This question has been settled in favour of the assessee by the High court of Punjab and Haryana in the case of Vikas Pipe Vs. CCE Chandigarh [2003 (59) RLT 979 (P&H). The ratio of the high Court's decision in contained in the last para of its judgment, which is reproduced below: -