Deemed credit on inputs denied where actual materials were outside the scheme, and extended limitation was upheld.

Deemed credit was not available where the inputs used in manufacturing electrical stampings and laminations were electrical silicon steel sheets and strips, not the HR/CR sheets covered by the deemed credit order. The detailed statement of the General Manager identifying the inputs was not retracted in time, and the record did not show that the department had been informed of the actual goods used. On that basis, the denial of deemed credit was upheld and the extended period of limitation was held to be properly invoked.

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Issues: Whether the appellants were correctly denied deemed credit on the inputs used in the manufacture of electrical stampings and laminations, and whether the demand was barred by limitation.

Analysis: The appellants claimed that the inputs were HR/CR sheets covered by the deemed credit order, but the record showed that they were in fact using electrical silicon steel sheets and strips, which were not covered by the scheme. The statement of the General Manager identifying the nature of the inputs was detailed and was never retracted in time. The department was not shown to have been informed that the goods used were electrical silicon steel sheets and strips, and therefore the invocation of the extended period was justified.

Conclusion: The denial of deemed credit was upheld and the extended period of limitation was correctly invoked, against the appellants.

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