1996 (7) TMI 260

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....tion of the trade. There is no legal or statutory binding factor in it. It is admitted in the impugned order that the trade notice was issued to prevent misuse the facility of Modvat credit. Impugned order does not charge that misuse had taken place. The charge is only of not following the procedure as laid down in the trade notice and therefore, it can best be held that there is a procedural irregularity and for this a substantive right cannot be denied. It is not the department's case that the inputs have not been used in the manufacture of final product, it is not the department's case that the inputs were not received, it is not the department's case that the final product was not duty paid and I therefore, hold that credit availed cann....

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....t it was not the case of the Department that ingots alleged to have been used by the party during the material period were not defective; that since the respondents admittedly used the defective steel ingots, the directions contained in the said Trade Notice were not applicable to the respondents case and therefore, contended that the show cause notice was not justified and warranted. After considering the submissions of the respondents herein, the Asstt. Collector ordered that the respondents herein should reverse back or pay by cash or through PLA Rs. 26,427/- which was wrongly taken as Modvat credit on 26.427 MTs. of raw materials. The Asstt. Collector also imposed a personal penalty of Rs. 8,000/- on the party. 3. Shri Y.R. Kila....

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....claration stating that the defective goods set out in the declaration as inputs shall be procured and used in the manufacture of ingots. In the Trade Notice issued by the Collector it was clarified that any assessee using defective steel ingots as inputs shall send D3 intimation to the jurisdictional of the Superintendent, Central Excise and also shall intimate the date of melting the defective steel ingots. The admitted position is that in the instant case the respondents admittedly melted the defective steel ingots for manufacture of steel ingots but did not send the intimation to the Superintendent, Central Excise before melting. The question for determination is whether this amounted to breach of rules or breach of procedure. The admitt....