ORDER
G.R. Sharma, Member (T)
1. M/s. Abrol Engineering Co. (Pvt.) Ltd. have filed this appeal against the order of Collector (Appeals) in which the Collector (Appeals) had held :-
“Therefore, the Assistant Collector while adjudicating the case has rightly refused the said credit and confirmed the demand for Rs. 34,434/- against the appellant and I see no reason to interfere with the impugned order of the Assistant Collector.”
The Assistant Collector in his finding had observed :-
“The party has disputed the demand on facts for Rs. 13,385.27 on the ground that the credit equivalent to this amount was in respect of C.R. Sheets and not in respect of Copper/Brass Sheets/Strips. As per records, the bills produced by the party did not show the complete description/variety of the goods. It was for the party to intimate the correct description/variety of the goods so that the admissibility of credit could be ascertained. So much so, even after the issue of show cause notice, the party did not produce before me any documentary evidence in support of their claim. Therefore, I observe that the credit claimed cannot be allowed.”
2. Briefly stated the facts of the case are that M/s. Abrol Engg. Co. was a manufacturer of Switch gears and Electrical goods and took credit of duty under Modvat scheme on the basis of deemed credit in respect of inputs Copper, Brass Sheets and Strips falling under sub-heading 7404 of the Central Excise Tariff in their RG 23A Part II register. As the department was of the view that deemed Modvat credit was not available, a show cause notice was issued to the appellant asking them as to why credit amounting to Rs. 36,262.07 availed by them should not be recovered from them under Section 11A of Central Excises and Salt Act, 1944. The appellant in reply to the show cause notice submitted that the Central Government issued orders under Rule 57G(2) on 7-4-1986 according to which steel and articles thereof falling under Heading 7206 to 7212, 7214 and 7307 are to be deemed to be duty paid and, therefore, deemed credit of duty was available to them; that the appellant had taken deemed credit amounting to Rs. 13,385.27 on C.R. Sheets falling under 7212 which has been included in the demand and that as the amount of deemed credit was admissible to them, to that extent the demand for duty amounting to Rs. 13,385.27 was not maintainable.
3. Ms. Archana Wadhwa, the ld. Advocate appearing for the appellant submitted that the finding of the ld. Adjudicating Officer that documents and Bills were not presented before them was not correct; that they had produced the RG 23A Part I and the supporting vouchers showing receipt of C.R. Sheets and used as inputs in the goods manufactured by them. The Collector (Appeals) in the order passed has held :-
“I have observed that the appellant have not produced any document evidencing the payment of duty as required and specified in proviso to Rule 57G(2) of the Central Excise Rules, 1944 in respect of the inputs for which the appellant took credit in their RG 23A Part II Register. This is one of the conditions for claiming credit.”
The ld. Counsel for the appellant submitted that this finding of the Collector (Appeals) is not right in as much as deemed credit is admissible. Had the documents of payment of duty on the goods been available, there was no question of claiming deemed credit and therefore the ld. Counsel submitted that the findings of the Collector (Appeals) in regard to payment of duty and production of document are not sustainable. The ld. Advocate submitted that C.R. Sheets falling under Chapter Heading 7212 was included in the order No. B/5/86/TRA, dated 7-4-1986 and that deemed credit @ Rs. 365/- per MT was available in terms of the order and was rightly availed by them; that the show cause notice proposed denial of Modvat credit on Copper, Brass Sheets and Strips only and not on C.R. Sheets and, therefore the demand amounting to Rs. 13,385.27 pertaining to Modvat credit on C.R. Sheets was not maintainable. The ld. Counsel also pleaded that the observations of the lower authorities in regard to non-production of Bills and the allegations that the Bills did not show the description of the goods correctly is factually incorrect. Having regard to the submissions made above, the ld. Counsel submitted that the impugned order may be set aside and the appeal may be allowed. In support of the above contentions, the ld. Counsel for the appellant cited and relied upon the decision reported in Order No. A/538-542/90-NRB, dated 20-12-1990 and in the case of CCE v. G.D.B. Industries, reported in 1991 (56) E.L.T. 622.
4. Shri B.D. Bhagat, the ld. JDR reiterated the findings of the lower authorities and argued more or less on the lines followed by the lower authorities. He pointed out that for purpose of deemed credit the goods must be recognisable as duty paid but since the goods were not recognisable as duty paid, therefore, the question of allowing deemed credit on the goods claimed by the appellant did not arise.
5. Heard the submissions of both sides and considered them. I find that Modvat credit amounting to Rs. 36,064.07 was denied to the appellant. Out of this Rs. 13,385.27 pertained to Modvat credit taken as deemed credit basis on use of C.R. Sheets as inputs. The appellant whereas did not agitate about denial of Modvat credit amounting to Rs. 22,878.80 taken as deemed credit on Brass Sheets, Copper and Strips. They agitated the denial of Modvat credit of Rs. 13,385.07 on the ground that credit was in respect of C.R. Sheets on which deemed credit @ Rs. 365 per MT was available. The Adjudicating Officer denied this deemed Modvat credit on the ground that the appellant did not produce before him any document evidencing their claim. The Collector (Appeals) also denied the benefit of deemed Modvat credit on C.R. Sheets on the ground that the bills do not show the complete description/variety of goods. Observing further, the Collector (Appeals) held that the appellant have not produced any document evidencing the payment of duty as required and specified in the proviso to Rule 57G(2) of the Central Excise Rules, 1944. It was pointed out during the course of submissions of oral arguments by the ld. Counsel for the appellant that necessary documents were produced before the Adjudicating Officer as well as the Collector (Appeals) and therefore, their findings on the issue of non-production of documents and incomplete description of goods was factually incorrect. From the records, I find that the appellant was including a copy of RG 23 A Part I during the relevant period alongwith the RT 12 returns. The description given in the RG 23A Part I and the Voucher was C.R. Sheets. I, therefore, observe that the findings of the lower authorities in regard to non-submission of documents as also about the incomplete description of the goods are not based on evidence. The finding of the Collector (Appeals) that duty paying documents were not produced in respect of C.R. Sheets on which deemed Modvat credit was claimed by the appellant, is not correct, as deemed credit is available only in cases where actual duty paying documents are not available-. Haying regard to the above facts and circumstances, I hold that deemed Modvat credit amounting to Rs. 13,385.27 on C.R. Sheets will be admissible to the appellant. The other issue regarding deemed Modvat credit on Copper, Brass Sheets and Strips was not agitated before me. The appeal is therefore allowed to the extent of Rs. 13,385.27 (Rupees Thirteen Thousand Three Hundred Eighty Five and Paise Twenty Seven only).
6. But for the above modification the impugned order is upheld and the appeal is disposed of accordingly.