Full Judgment
2. The issue relates to claim of the appellant for deemed credit under Notification No. 58/97-CE dated 30.8.97. The notification permits deemed credit at 12% of the invoice value provided the purchase of the input is directly from a manufacturer working under compound levy scheme (Section 3A of the Central Excise Act) and the invoice contained a declaration that "appropriate duty of excise has been paid" on such inputs". In the present case, the objection taken by the Revenue is that the declaration contained in the invoice is that "duty liability to be discharged under Rule 96ZP(3)" and it is being contended that this declaration does not satisfy the requirement of the notification that, appropriate duty has been discharged. The explanation of the appellant is that the working of the declaration is in view of peculiar circumstances. The suppliers were working under compounded levy scheme and were discharging duty also. However, there is some dispute between the revenue and the assessee as to the quantum of duty payable and that matter was pending before different authorities. However, there was no dispute at all that duty was to be paid under compounded levy scheme.
It is the contention of the learned Counsel that declaration should be taken as satisfying the requirements of the notification. In this connection, he referred to the decision of the Hon'ble High Court of Punjab & Haryana at Chandigarh in the case of Vikas Pipe v.Commissioner of C. Ex. Chandigarh-II, 2005 (99) ECC 11 (P&H) : 2003 (158) ELT 680 (P&H). Specific reference was made to para 3 of the judgment which is reproduced below: -- "3. In that case the Tribunal had taken a contrary view and this Court had upheld the same holding that the deemed Modvat credit can be claimed in terms of Notification No. 58/97 and that the only requirement of the notification is that the assessee should produce the invoices covering the goods in which the manufacturer should give a declaration that the manufacturer had suffered excise duty.
In the case before us the show cause notice issued to the assessee itself points out that the suppliers have been declaring on these invoices that the inputs suffered excise duty but the Tribunal obviously went wrong in holding that since excise duty had in fact not been paid by the supplier the assessee was not entitled to claim Modvat benefit. Since there is no requirement in the notification that the assessee has to lead evidence in show that the supplier had discharged its excise duty liability, we are clearly of the view that the Tribunal was in error in disallowing the Modvat credit to the assessee, Consequently, the aforesaid question which arises from the order of Tribunal is answered in favour of the assessee and against the Department holding that the assessee in the circumstances of the present case is entitled to the benefit of Modvat credit. The petition stands disposed of as above." The Counsel has also relied on this Tribunal's decision in the case of Shree Ambica Steel in Appeal No. E/1342/ dated 21st Sept. 2004, 2004 (96) ECC 513 (Tri) 3. The revenue's appeal is on the ground that the assessee had not discharged the duty liability "as fixed by the Commissioner" and that the final order of the CEGAT No. A/718-722/01-NB(DB) in the case of Bhagwati Steel Industries has not attained finality and the department has filed reference application before the Hon'ble Punjab & Haryana High Court.
4. The requirements under Notification No. 58/97 is that duty should be paid on the inputs under compound levy scheme and invoice should contain certificate to this effect. In the present case, there is no dispute that the input suppliers were wording under compound levy scheme and they were discharging duty liability also. The dispute was not with regard to dutability under compound levy scheme or payment of duty under that scheme but only with regard to the quantum of duty. The working of the certificate in the present invoices reflect that dispute. A dispute about quantum of duty is not to affect deemed credit. The appellant is right in relying on the decisions of the Hon'ble High Court of Punjab & Haryana and this Tribunal.
5. There is no merit in the Revenue's case. As already noted, the requirement is that "appropriate duty" must be paid under compounded levy scheme" and not that the duty must be paid "as fixed by the Commissioner". As to whether the duty fixed by the Commissioner is appropriate duty, the assessee is at liberty to challenge before statutory authorities. Such a challenge is no reason to hold that the duty paid is not appropriate. The filing of a reference application before the High Court also, in no way, affects the deemed credit claim by the appellant. The deemed credit has no co-relation with the actual amount of duty paid. The only requirement is that duty must be paid under the compound levy scheme. The appeal fails and is rejected.