TaxTMI 
TaxTMI 
2000 (5) TMI 372
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....heading 8503.00 of Tariff Act, using aluminium alloy as input, availing deemed Modvat credit and have filed necessary declaration and complied the required procedure under Modvat Scheme. Deemed Modvat credit is available to appellant persuant to Government of India order No. 342/1/88-TRU dated 12-7-1990. Superintendent, Central Excise, Ponda range issued show cause notice dated 11-3-1991 for the period 1-9-1990 to 31-12-1990, and dated 26-7-1991 for the period February to April, 1991 alleging that appellant availed deemed Modvat of Rs. 2,44,163/- on 26007.43 kgs. and of Rs. 2,39,307.24 on 2467.85 kgs. of input, alleging contravention of Central Excise Rules, and for penal provision invocation and disallowing and recovery of the above amount....
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....synopsis and case laws cited. Deemed Modvat credit availment under Government of India Order No. 342/1/88-TRU dated 12-7-1990 on the inputs aluminium alloys purchased from traders to manufacture the final product Aluminium Die Cast Articles by the appellant is challenged on the ground that input aluminium alloys purchased by the appellant from traders is exempted from Central Excise duty under notification No. 180/88, dated 30-5-1988 and it is a non duty paid or exempt input. The appellant's reply is that since no duty paying document has accompanied the input, and traders have obtained it from the manufacturers, deemed Modvat credit is available under the above Government Order. From the material available on record it is seen that none of....
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.... that "interpretation of proviso barring the deemed credit was subjected to contradictory decisions of the Tribunal and need to be resolved by Larger Bench" - and so penalty imposed was not justified was upheld and was set aside. 6. Now dealing with the Larger Bench decision in paras 20(iii), 21, 23 and 25 in 1996 (83) E.L.T. 576 in the case of Machine Builders v. CCE, Bolpur it is held that. "The correct view is words wholly exempt from duty would take in cases of unconditional exemption of whole of duty payable, and also conditional exemption of such duty where conditions are shown to have been complied" [as per para 20(iii)]. The burden of proof in relation to cases of conditional exemption is the initial burden is on the manufac....
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....clearly recognised as not being duty paid or charged to nil rate of duty. This consequence may automatically follow in the case of unconditional exemption, once it is shown that the inputs in question are attracted by notification. In the case of conditional exemption unless it is shown that all the conditions are satisfied in a given case, it cannot be stated with certainty that that the inputs are wholly exempt or are clearly recognisable as non duty paid or charged to nil rate of duty. It is therefore for the revenue by conducting necessary enquiry (and it shall be the duty of assessee to cooperate) to see if the conditions re- satisfied and the exemption notification has fully taken effect in regard to the inputs in question. Revenue ca....
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....ow. 9.  In the order in original, Deputy Collector of Central Excise in page 2 and 3 has analysed the Government Order dated 12-7-1990 issued under Rule 57G holding at "deemed credit mentioned therein on the inputs is not to be allowed, in respect of such inputs which are clearly recognisable as non duty paid or charged to nil rate of duty, and two conditions of being recognisable as being non duty paid and of being wholly exempt from duty or charged to nil rate of duty are distinct and mutually exclusive." Show-cause notice allegation in this case is "inputs are exempt from the whole of Central Excise duty leviable thereon under exemption notification 180/88 dated, 13-5-1988 order under Rule 57G treating all stocks of inputs to be ....
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....nly in Tariff Entry and aluminium alloy is chargeable to nil rate of duty in the notification 180/88 and clearly recognisable as non duty paid. 11.  From the appeal memorandum, grounds of appeal at pages 5 to 10 under (A) to (G) the above order is challenged on various grounds, out of which, one is notification No. 180/88 is a conditional notification and it is not considered and held that input aluminium alloy was not liable to duty and so deemed Modvat credit was not eligible. As contented by the appellant, para 23 of the Larger Bench decision in Machine Builders's case clearly covers this case. None of the orders of lower authorities dealt with the aspect of burden of proof on the department to show that the aluminium alloy has n....