NAHAR INTERNATIONAL LTD Vs. COLLECTOR OF C. EX.

JUDGEMENT

(1.) THIS application seeking waiver of pre -deposit of duty of Rs. 42,14,067.86 and stay of its recovery proceedings has been filed with reference to Order -in -Original No. 98 -CE/94, dated 26 -12 -1994 of Collector of Central Excise, Chandigarh. The issue involved is admissibility or otherwise of deemed credit in case of Iron and Steel scrap falling under the then Tariff Item 72.03 during the period May" 1986 to August, 1986.

(2.) THE appellants are engaged in the manufacture of steel ingots, billets. The appellants have stated that the inputs primarily are waste and scrap of iron and steel which they purchased from the open market.

(3.) ARGUING for the appellants Ld. Advocate submitted under Rule 57(A), the inputs they purchased and final products are notified items and therefore they were eligible to take credit of duty. They had been permitted to avail deemed credit on iron and steel scrap purchased from the open market without production of duty paying documents. This was permitted to them under direction issued by Central Govt. under proviso to Rule 57(G)(2) of Central Excise Rules because of representation made in regard to difficulties in obtaining duty paying documents to cover material purchased from the open market. The Central Govt. however vide his Order No. B -22/30/86 -TRU dated 29 -8 -1986 withdrew deemed credit facility in respect of Chapter 72.03 and therefore w.e.f. that date they were not eligible for deemed credit in case" of iron and steel scrap. The Central Excise Officer while assessing RT 12 returns on 18 -9 -1986 for the months of May 1986 to August 1986 disallowed Modvat credit taken and utilised by them. Through show cause notice dated 5 -12 -1986, the Asstt. Collector called upon to show cause why Modvat credit availed during the period May 1986 to August 1986 be not recovered. The appellants filed writ petition in the High Court of Punjab and Haryana which through judgment of the Hon'ble Judge was dismissed with the direction that assessment should be made after considering the show cause notice in the light of the observations made in the judgment. They filed LPA against the aforesaid Order and while the Division Bench of the Hon'ble Court dismissed the LPA vide its Order dated 2 -9 -1993, the Hon'ble Bench observed as under :