Deemed credit on classified inputs sustained where M.S. tie bar materials were accepted as bars, not flats.

Inputs used in the manufacture of M.S. tie bars were accepted as bars on the basis of their classification and description, so the assessee remained entitled to deemed credit. The demand was raised on the footing that the inputs were flats and that duty-paid documents were not produced in remand proceedings, but the record did not justify disturbing the accepted finding on classification. As the inputs were rightly treated as bars, the duty demand was not sustainable and the challenge by the revenue failed.

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Issues: Whether the inputs used in the manufacture of M.S. tie bars were bars so as to attract deemed credit and render the duty demand unsustainable.

Analysis: The appellate authority had accepted the assessee's contention that the inputs were bars and not flats, relying on the earlier classification of the goods and the Tribunal's view on the nature of such inputs. The record did not show any basis to disturb that finding. The demand had been raised on the premise that the inputs were flats and that duty-paid documents were not produced in the remand proceedings, but the classification and the benefit flowing from the accepted description of the inputs supported the assessee's case.

Conclusion: The inputs were rightly treated as bars and the assessee was entitled to the benefit of deemed credit. The demand was not sustainable.

Final Conclusion: The revenue's challenge failed and the order setting aside the demand was upheld.

Ratio Decidendi: Where the accepted classification and description of the inputs establish them as bars, the assessee cannot be denied the benefit of deemed credit merely by treating them as flats for the purpose of duty demand.

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