TaxTMI 
TaxTMI 
1994 (7) TMI 179
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.... Rs. 5,000/- Sept. 92 Jan. 93 1437/93 2538/93 26-3-1993 Rs. 39,990.56 Rs. 5,000/- March 92 Aug. 92 1438/93 2539/93 23-4-1993 Rs.11,863.1 Nil Jan. 92 Dec. 92 1439/93 2540/93 26-3-1993 Rs.1,64,647.18 Rs. 15,000/- March 92 Aug. 92 2. We have heard Shri V. Sridharan, learned Counsel for the applicants and Shri V.C. Bhartiya, learned DR for the Revenue. 3. The issue relates to deemed Modvat Credit on waste and scrap of aluminium purchased by the applicants who are manufacturers of Electric fans from the open Market. The Assistant Collector as well as the Collector (Appeals), as per the respective orders, held that deemed Modvat credit is not available to the applicants in terms of the Deemed Credit Order No. 342/1/88-TRU, dated 12-7-1990 (issued under Second proviso to Rule 57G(2) on the ground that scrap purchased from the open market comprised mainly of used broken parts of aluminium utensils, machinery and motor parts etc. which were not obtained as a result of conscious manufacturing process and that under Notifications No. 172/84 and No. 182/84, aluminium utensils were exempt from payment of duty. As a result, the aluminium scrap was not eligible....
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....ot be considered as identical or similar and have to be distinguished on facts. 8. In the case of scrap also it is required to be noted that there is various types of scrap such as virgin scrap and other scrap and in view of various exemption Notifications all the goods in the market need not necessarily be duty paid one. Therefore if in a particular case, the Department was able to discharge its initial onus. The burden will shift to the other side. Hence, he merely citing other cases does not help unless it could be shown that particular case was identical and on all fours with the present one. 9. In this case, the Department has claimed that this scrap included aluminium utensils which was exempt from duty under Notification Nos. 172/84 and 182/84 and also cited Trade Notice No. 27/92 of Allahabad Collectorate. Whereas appellants have not been able to show anything to the contrary hence it cannot be said at this stage that the input was clearly recognisable as non-duty paid and the matter could be considered at best as arguable. At the same time prima facie, it remains to be seen whether the appellants could be said to have a mala fide intention in the face of the tr....
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....and relied upon the judgment of the Hon'ble Bombay High Court in the case of Vapsons Products, Bombay v. UOI. In this case, the Hon'ble Calcutta High Court agreed with the decision of the Hon'ble Calcutta High Court. Hon'ble Calcutta High Court duly approved the Tribunal's decision in the case of Calcutta Paper Mills v. CEGAT. The relevant paragraph of the above judgment is reproduced below : "4. In my judgment, the orders passed by the two authorities below are clearly unsustainable. It is undoubtedly true that the burden to establish that the advantage of the exemption notification is available is on petitioners, but it is impossible to conclude that the petitioners have not discharged the burden successfully. The petitioners have purchased the base dyes from the open market and the petitioners are perfectly justified in claiming that excise duty has been paid on the goods available in the market. Rule 9(1) of the Central Excise Rules, inter alia, prescribes that the goods shall not be cleared from the factory gate until the excise duty leviable thereon has been paid. Indeed, it has been made a criminal offence, if the goods are removed from the factory without payment of ....
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....d not suffer duty at the time when such goods were removed by the manufacturer from the concerned factory. Submitting that the Tribunal in a number of cases has held that the onus of proving that the goods were clearly recognisable as non-duty paid squarely lies on the department, the ld. Counsel also referred to the case of Arun Auto Spring and Manufacturing Co. v. CCE reported in 1990 (49) E.L.T. 284 wherein the Tribunal had gone a step further and held as under :- "10. The aforesaid arguments further narrow down the area of interpretation with regard to the following provisions in the order :- "If such inputs are clearly recognisable as being non-duty paid or charged to nil rate of duty." It is not the case of the department that the goods have been removed from Excise or Customs area without payment of duty and hence they are to be construed as non-duty paid. The department states that the goods have been supplied by a manufacturer, who is entitled to avail of the exemption legally extended under Notification No. 208/83. In view of the position, the goods cleared, availing of exemption legitimately available to the manufacturer, cannot be construed to be non-duty paid. ....