Judgment:
1. Captioned 11 applications have been filed by the applicants for dispensing with pre-deposit of duty. This demand arose because of disallowance of deemed Modvat credit on re-rolling material obtained by the applicants from the railways. The lower authorities held that re-rollable material obtained by the assessee cannot be treated as duty paid inasmuch as it was the old and used material that was purchased by the applicants and used as re-rollable material.
2. Shri Gopal Prasad, ld. Advocate for the applicant submits that the Govt. of India order on deemed Modvat credit contained in F. No.342/1/88-TRU, dated 12-7-1990 does not stipulate any condition on payment of duty whatsoever it stipulates only three things and the three stipulations are that deemed Modvat credit will be available on re-rollable material of iron or steel purchased from outside; that it was either lying in stock on 7th day of July, 1992 and third that it was obtained after 7th July, 1992. Ld. Counsel submits that this order of the Govt. of India as also the order of the Govt. of India dated 1-3-1994 does not in any way stipulate so about the payment of duty.
The presumption is that the re-rollable material was duty paid, and that it would be deemed to have paid duty at the rate of Rs. 920/- per M.T. He, therefore, submits that the lower authorities have wrongly disallowed them deemed Modvat credit in support of his contention that the letter dated 12-7-1990 and subsequent letter on the same subject dated 1-3-1994 do not stipulate any condition except as indicated above. In support of his contention he cites the decision of this Tribunal in the case of N.K. Gossain & Co. (P) Ltd. v. Commissioner of Central Excise, Calcutta-I as reported in 1997 (21) RLT 173. In this decision, Larger Bench decision in the case of Machine Builders and Ors. v. Customs of Central Excise, Bolpur and Ors. as reported in 1996 (12) RLT 817 has been followed. Ld. Counsel submits that since two decision clearly covers his case, therefore, pre-deposit of duty to be dispensed with.
3. Opposing the request of dispensing with pre-deposit of duty, ld. DR submits that in the case of Machine Builders and Ors. cited and relied upon by the appellants, the Tribunal has specifically observed that the goods in any case should have paid duty but for time lapse cannot submit duty paying documents he submits that nowhere the Govt. under rules is empowered to dispense with the duty paid character of the inputs even for deemed Modvat credit. He submits that in the instant case since the material was discarded and used wheels to have paid duty and since they have not paid duty the question of taking deemed Modvat credit did not arise. He extensively read from paras 22 & 24 of the Larger Bench decision of the Tribunal in the case of Machine Builders and Ors. Ld. DR therefore, submitted that prima facie, the appellants do not have a case and therefore, prayed that they may be directed to deposit the entire amount of duty. Ld. DR also cited the decision of this Tribunal in the case of Rane Steels v. C.C., Allahabad contained in Order No. 246/97-A, dated 4-2-1997.
4. Heard the submissions of both sides and perused the case law. We note that the decision of the Larger Bench was a specific on Govt.
orders dated 7-4-1986, 3-11-1987 and 2-5-1987 and observed that any order issued by the Govt. of India in exercise of the powers under Rule 57G of the Central Excise Rules is to be read in accordance with the stipulations thereon. This is the central issue in all the decisions cited and relied upon by both the sides. Here in the instant, we are concerned with the Govt. of India order contained in F./342/1/88-TRU, dated 12-7-1990. ld. Counsel for the applicants has elaborated this order. We find force in his contention that the order nowhere speaks about the payment of duty. This only stipulates three conditions as enumerated earlier. Even otherwise we find that there are only two different views on the subject. In the circumstances, we dispense with pre-deposit of duty. However having regard to the fact that a lot of revenue is involved, we direct that these appeals should be listed for early hearing. The stay petitions are disposed of in the above terms.
Recovery of penalty shall remain stayed during the pendency of the appeal. To come up for hearing on 6-4-1998.