JUDGMENT
Gowri Shankar, Member (T)
1. The application is for waiver of deposit of duty of Rs. 13,53,810/- and equal penalty. The duty has been demanded, and penalty imposed, on the view that the applicant was not entitled to the benefit of the exemption contained in entry 144 of the table to notification 4/97, for the reason that the condition subject to which the exemption was available, that modvat credit is not taken on input, was contravened, as the applicant had taken credit of the duty paid on furnace oil.
2. The representative of the applicant contends that since credit has been taken only on furnace oil which is used as fuel, the condition contained in the entry has not been breached. We do not prima facie find it possible to agree. The furnace oil was clearly used as an input, and credit of the duty paid has been taken on input. On merits, therefore, the applicant has prima facie no case. The notice dated 20th August, 2000 demanded duty on clearance made between 1.4.1997 to 30.6.2000, invoking the extended period of limitation contained in the proviso under Sub-section (1) of Section 11A of the Act. It is contended that this extended period of limitation will not apply because the applicant in its declaration dated 18.4.1995 under Rule 57G had shown furnace oil an input. Further, in the classification declaration filed by the applicant on 5.6.1997, the fact of manufacture of the rubberised textile fabrics, on which duty has been demanded, had been declared and the jurisdictional Superintendent certified that he had visited the factory, verified the manufacturing process and satisfied himself about the correctness of the classification. We are again prima facie unable to agree. The departmental representative points out that the declaration contained a remark that credit is being availed of duty paid on inputs used for the manufacture of inputs.
3. Having regard to these aspects, we consider it appropriate to ask the applicant to deposit Rs. 6 lakhs out of the duty demanded. On such deposit within a month from the receipt of this order, we waive deposit of the remaining duty and penalty and stay their recovery.
4. Compliance on 15th September, 2003.