ORDER
Shiben K. Dhar, Member (T)
1. This appeal is directed against order in appeal No. 988/CE/CHD/91, dated 21-6-1991. The issue involved relates to admissibility or otherwise of Modvat Credit taken in respect of resin used in the manufacture of what appellants claimed as Air bags, Moped Tyres.
2. Arguing for the appellants the Ld. Counsel submits that show cause notice was issued on the ground that appellants had taken wrong Modvat Credit of Rs. 6352.50 and utilised the same wrongly and the appellants in their earlier declaration dated 4-4-1986 did not declare inputs as Chapter 39 subheading No. 3905.51. While this was basis for the show cause notice Assistant Collector in his order No. 134/CE/Demand/AC/88 travelled beyond show cause notice and confirmed the demand on the ground that Air bags which on neither intermediate product nor inputs for manufacture of tyres but are tools and therefore Modvat Credit is not admissible. This was the sole ground on which the Asst. Collector confirmed demand while accepting their other pleas. They were never put on notice in regard to these. In fact they specifically before Collector (Appeals) mentioned that the Asstt. Collector has travelled beyond the show cause notice and confirmed the demand on a charge not disclosed to them. Collector (Appeals), however, did not record any finding on it.
3. The Ld. D.R. submits that originally resins were classified under Heading 38 and subsequently under 39 and reiterated the departmental arguments.
4. Considered. I find show cause notice dated 18-4-1988 merely mentioned that the appellants took credit of duty which was not admissible on the inputs of Chapter 34 purchased before 8-12-1989 and that the declaration filed earlier dated 4-4-1986 does not declare inputs under Heading 39. On this ground notice requires them to show cause why Modvat Credit of Rs. 6352.50 should not be recovered. The Asst. Collector in his order records that “main irregularity brought to surface in the show cause notice would not survive merely on the reasons that in the declaration, party had filed the classification list of input under Chapter 38 whereas the duty paying documents showed the same to be under Chapter 39.I, therefore, agree with the arguments adduced by the party”. After having said so the Asst. Collector goes on confirming the demand on the ground that as Air bags in the manufacture of which resins are used are tools, no credit is admissible in regard to such resins as are used in the manufacture of Air bags. I find that the appellants were not put on notice for this charge. In fact charges as such were mentioned in the show cause notice were dropped by the Asst. Collector in the earlier part of his order has not proved. In the light of this, the order of the Collector (Appeals) and orders of the Asst. Collector suffer from an obvious infirmity. Considering it was specifi-cially pointed to the Collector (Appeals) that the Assitant Collector had travelled beyond show cause notice to confirm the demand. Considering that there is basic infirmity in the proceedings both at the level of Assistant Collector in that Asst. Collector had travelled beyond show cause notice and confirmed the demand on the charge not disclosed to the appellants and the Collector (Appeals) upheld the order in spite of this infirmity, I set aside the order and allow the appeal.