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of <h1>Manufacturers must deposit Rs. 4 lakh to halt duty recovery. Non-compliance risks appeal dismissal.</h1> <h3>ADVANCE STEEL TUBES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT</h3> ADVANCE STEEL TUBES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MEERUT - 1997 (93) E.L.T. 473 (Tribunal) Issues:1. Entitlement to benefit of Notification No. 202/88-C.E.2. Claim for Modvat credit on goods.3. Maintenance of records under the Modvat scheme.Entitlement to benefit of Notification No. 202/88-C.E.:The case involved the applicants, engaged in manufacturing galvanized steel tubes, pipes, and structurals, who claimed the benefit of Notification No. 202/88-C.E. for steel sheets not exceeding 5 mm in thickness. However, the departmental authorities found some steel sheets purchased by the applicants with thickness exceeding 5 mm. Consequently, the authorities demanded duty of Rs. 11,17,992.50 and imposed a penalty of Rs. 4 lac. The applicants sought dispensation of this duty and penalty, arguing that if the benefit of the notification was denied, they should be entitled to Modvat credit of Rs. 8,17,678.00. The Tribunal directed the applicants to deposit Rs. 4 lakh within 8 weeks to stay the balance of duty and penalty recovery during the appeal.Claim for Modvat credit on goods:The respondent Commissioner contended that the applicants were not entitled to Modvat credit as they had not maintained the required records under the Modvat scheme and had not filed the necessary declaration. The Commissioner opposed the request for dispensation of duty and penalty, arguing that the entire amount should be paid by the applicants. The Tribunal noted that duty had been paid on steel sheets exceeding 5 mm in thickness, and since the applicants claimed the benefit of the exemption notification, they were not eligible for Modvat credit on the inputs. The Tribunal directed the applicants to deposit Rs. 4 lakh within 8 weeks to stay the recovery of the balance of duty and penalty during the appeal.Maintenance of records under the Modvat scheme:The respondent Commissioner highlighted that the applicants had not maintained the required records under the Modvat scheme and had not submitted the necessary declaration, which rendered them ineligible for Modvat credit on the goods. The Commissioner argued for the full payment of duty and penalty by the applicants. The Tribunal directed the applicants to deposit Rs. 4 lakh within 8 weeks to stay the recovery of the balance of duty and penalty during the appeal, without delving into the evidential details at that stage. Non-compliance with the order would result in the dismissal of the appeal without further notice, with a reporting compliance date set for 28-7-1997.
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