TaxTMI 
TaxTMI 
1999 (8) TMI 239
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.... 14,72,585/- on various types of scrap such as Brass scrap, Aluminium scrap. Zinc scrap, Steel scrap etc. generated in the factory of the appellants who are inter alia manufacturers of Brass caps and tin coated steel bottom caps for use in the manufacture of electric Batteries (Dry) and cleared during the period from 1-3-1986 to November, 1997 for the reason that Modvat credit had been availed by the assessees on the inputs out of which scrap arose, thereby rendering the inputs non-duty paid in character, resulting in non-fulfilment of the conditions in Notifications granting exemption to various kinds of scrap (such as Notification 172/84 for Brass scrap, Notification No. 182/84 for Aluminium scrap, Notification No. 178/84 for Zinc scrap e....
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....ication exempting scrap, was not attracted and hence duty was payable on various types of scrap. We find that the settled legal position as per the decision of the Tribunal is that taking of Modvat credit or proforma credit will not make the inputs non-duty paid in view of the Tribunal's decision in the case of Metal Lamp Caps India Ltd. v. Collector of Central Excise, Bangalore reported in [(1995 (76) E.L.T. 177] which has been followed in several cases. We also note that the assessees' stand that the demand on scrap of aluminium, zinc and brass pertains to the period prior to 2-11-1987 has not been rebutted and that it is only with effect from 2-11-1987 that various Notifications granting exemption to scrap were amended by incorporation o....
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.... of a common input. The issue relating to use of input in the manufacture of both declared and undeclared final products, has been the subject matter of several decisions of the Tribunal. In the case of Friends Wire Industries v. Collector of Central Excise, Chandigarh [1995 (80) E.L.T. 219], the Tribunal held that utilisation of credit on undeclared final product is not permissible and is to be paid either from PLA or in cash and further held that this credit should be restored to the RG 23A account (Modvat account) for utilisation for duty payment on eligible final product. In the case of Mukesh Engg Industries v. Collector of Central Excise, Bombay [1995 (79) E.L.T. 718], the Tribunal took the view that if Modvat credit is denied, duty m....
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....squarely cover their case also. As observed by the Tribunal in Mahindra and Mahindra Ltd. case, the objection of the department is technical. There could be an order to make payment of duty involved on undeclared motor vehicle parts through PLA but it has to be simultaneously with the restoration of an equal amount in RG 23A Part II for utilisation towards the duty on the declared final product namely, motor vehicles. Such an order will be an idle exercise as there is no revenue implication otherwise. Therefore, TELCO's appeals merited acceptance, following the decisions of CEGAT in Mahindra & Mahindra and other cases. Accordingly, the appeals are required to be allowed with consequential relief to the appellants. " 3. In the presen....
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.... duty were to be paid on brass caps under Tariff Item 68, the other two units would take credit of the same and the Notification No. 201/79 and utilise it for payment of duty on batteries and therefore, there cannot be any intention on the part of the assessees to evade payment of duty and hence the proviso to Section 11A of the Act is not attracted. He has dropped the demand for the period subsequent to 1-3-1986 on the ground that since both brass caps and batteries fall under Heading 85.06 which is a notified heading for inputs and final products under the Modvat scheme and hence if duty had been paid on brass caps by the first unit, Modvat credit would have been taken by the other unit and therefore, there could be no intention to evade ....