ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Madras, dated 24-11-1987 confirming the order of the Deputy Collector of Central Excise, Hyderabad, dated 25-5-1987 and rejecting the appellants’ claim for deemed MODVAT credit in respect of the inputs beams, angles, etc. received from the State Electricity Board, Railway Electrification Projects, etc. for production of Steel towers, etc. on job work basis and the amount involved is Rs. 61,098.81.
2. Shri Dev, the learned Consultant for the appellants, at the outset submitted that MODVAT credit has been disallowed under the impugned order on the ground that the inputs had not been purchased from outside but received from third parties and as such would not be eligible for deemed credit under Rule 57G of Central Excise Rules, 1944. It was contended that irrespective of the fact whether the goods were actually purchased from the market or received from third parties they would be eligible for deemed credit in terms of Rule 57G and also the instructions issued thereunder by the Govt. of India dated 7-4-1986.
3. Shri Bhatia, the learned Senior D.R., contended that the issue may be remitted for re-consideration in the light of the statutory instructions by the Ministry of Finance dated 7-4-1986.
4. We have carefully considered the submissions made before us. The short question that arises for our consideration in the present case is whether the inputs would be eligible for deemed credit under MODVAT Rules and whether the view taken by the authorities below that MODVAT credit cannot be granted inasmuch as the goods were not purchased by the appellants from the market is correct or not. We have gone through the Rule 57G and we do not find any warrant at all on a plain reading of the Rule disentitling the appellants to deemed MODVAT credit in respect of the inputs in question. We are also fortified in this respect by the statutory instructions issued by the Government of India dated 7-4-1986 in Order F. No. B. 22/5/1986-TRU read with the Trade Notice No. 83/89 dated 26-4-1989 and the Trade Notice reads as under :-
“It has been represented by the Trade that there is disparity in permitting deemed MODVAT credit to the manufacturers on the inputs which were purchased from market vis-a-vis those which were sent to job workers for manufacture of final products. The matter has been examined and it is decided that deemed MODVAT credit should be permitted on all the inputs whether purchased or otherwise received by the manufacturers unless such inputs are clearly recognisable as non-duty paid or chargeable to nil rate of duty.”
Since in terms of the above Trade Notice deemed credit is permissible on all the inputs whether purchased or otherwise received by the manufacturer unless such inputs are clearly recognisable as non-duty paid or chargeable to nil rate of duty, we are inclined to hold that the appellants would be entitled to take deemed credit in respect of the inputs in question. We would like to note in this context that it is not the case of the Department in the show cause notice that the inputs are clearly recognisable as non-duty paid. On the other hand the lower appellate authority has entered a finding in the impugned order that all other conditions are satisfied. In the result the impugned order is set aside and the appeal is allowed.