Deemed credit on aluminium shots allowed where duty-paid ingots were job-worked and no excess credit arose

Deemed credit on aluminium shots was admissible where aluminium ingots had suffered the same duty rate, both products fell under unwrought aluminium, and the shots were generated from duty-paid ingots through job work under intimation under Rule 57F(2). The credit chain did not exceed the duty already attributable to the ingots, so no excess credit was availed and the situation was revenue neutral. On that basis, the denial of deemed credit was unsustainable.

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Issues: Whether deemed credit on aluminium shots was admissible when the duty paid on aluminium ingots had not been credited by either the manufacturer or the job worker and the goods were processed through job work under intimation under Rule 57F(2).

Analysis: The duty rate on aluminium ingots and aluminium shots was the same and both were classifiable under unwrought aluminium. The quantity of aluminium shots produced from the ingots could not exceed the quantity of ingots on which duty had already been paid, and the appellants were otherwise entitled to credit of that duty. In these circumstances, the taking of deemed credit on the aluminium shots did not result in availment of credit beyond what was legitimately available on the ingots. The situation was therefore revenue neutral.

Conclusion: The deemed credit could not be denied, as no excess credit had been taken and the impugned order was unsustainable.

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