1997 (4) TMI 271

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....9-9-1986. This order waives the requirement of receiving input material under cover of duty paying documents in respect of certain specified goods in the Notification but the order says that such deemed credit cannot be taken where the article is clearly recognisable as non-duty paid or is subject to nil rate of duty under the Tariff. The Additional Collector of Central Excise initiated proceedings against the Respondents by issue of Five Show Cause Notices between 1-1-1992 and 30-6-1993 for the period between June 1991 to June 1993. The charge was that the material on which Respondents had taken deemed Modvat credit was in the nature of Bazar scrap on which no duty has been paid therefore, they are recognisable as non-duty paid leading to ....

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....e larger bench decision in the case of Machine Builders v. Collector of Central Excise, reported in 1996 (83) E.L.T. 576 (Tribunal) that the material should be regarded as clearly recognisable as non- duty paid. Therefore, the denial of deemed Modvat credit in this case is justified. 3. Shri B. N. Rangwani the ld. Consultant for the Respondents relied upon the Tribunal decision in the case of Kanungo Alloys Pvt. Ltd. v. Commissioner of Central Excise, Jaipur reported in 1996 (16) RLT 777 (CEGAT-NB) to say that the Department has to prove that the scrap is clearly recognisable as non-duty paid and in this case the ld. Consultant pointed out that the invoices and the bills under which they have received the material is with the Depart....

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....s were not generated in the manufacturing process of any lead or lead articles. In other words, the dealers are the suppliers of such waste and scrap to the assessee and they are not manufacturer of lead scrap of lead articles neither they in turn or directly purchasing it from the organised sector or tiny sector who are manufacturing lead items. Obviously, such waste and scrap has not been generated in the process of manufacture of lead ingots or lead articles. Rather it is an admitted fact that such waste and scrap are Bazar scrap and have been collected from hawkers as "Bhangar" and it consists of old and used or weared and teared articles of lead which has out lived its utility. Such scrap have arisen out of old and used machinery, lead....