Full Judgment
2. Shri Hassan Khan, the Ld. Consultant for the Appellant submitted that the issue relates to availment of Modvat Credit for the period 1.4.1986 to 31.12.1989 in respect of certain inputs like copper, brass sheets etc. used in the manufacture of Radiators cleared under Chapter 10 procedure. The Ld. Consultant submitted that the Appellant produced a certificate in respect of the credit taken on the various inputs and the Deptt. verified the correctness of the certificate and accepted it and also assessed the R.T. 12 assessment. Therefore, in such a situation the Deptt. cannot adjudge the issue by alleging suppression by issue of Show Cause Notice on 26.3.1991. Therefore, the levy is clearly barred by limitation.
4. On going through the records and considering the submissions made before us we are inclined to think that the bar of limitation would be applicable in the facts of this case particularly in the light of the admitted fact that certificates in respect of the input for which Modvat Credit had been taken were filed and verified by the Deptt. and the Deptt. also assessed the Appellant's RT-12 continuously and therefore the Appellant cannot be said to be guilty of any suppression to enable the Deptt. to invoke the longer period of limitation. In this view of the matter the impugned Order is set aside and the Appeal is allowed.Dt. 5.4.1994 Sd/- (S. Kalyanam) 5. Per Shri V.P. Gulati.-I observe that the issue involved in the proceedings is reversal of the Modvat Credit relating to the waste arising during the course of manufacture of the Radiators cleared free of duty under Chapter 10 procedure. The Ld. Consultant for the Appellant has pleaded that as it is the waste arising in the process of manufacture has been cleared by them on payment of duty and it cannot be said that the Deptt. was not aware of the fact that the waste generated in the process of manufacture of Radiators cleared free of duty and it could not be said that it was not accounted for. In fact all that the Appellant has done was within the knowledge of the authorities and the reversal of the Modvat Credit in respect of the input contained in the finished product cleared on payment of duty was based on the certificate of the receiving factories regarding the manufacture receipt and use of the radiators cleared without payment of duty. All relevant operations of the Appellants were within the knowledge of the Authority.
6. The Ld. Departmental Representative pleads that so far as the waste is concerned it was contributable to the radiators cleared without payment of duty and the Appellant did not separately bring it on record for the Authorities to take note of it.
7. At the outset I would like to observe that in a number of decisions the Tribunal has held that where the inputs are used in a factory for production of specified finished product and the part of the same is cleared without payment of duty under any Notification, the Modvat Rules do not provide for reversal of the Modvat Credit as such. If this is be (sic) the legal position as settled, the question of reversal of any Modvat Credit in respect of the waste generated would not arise. Be that as it may, the fact remains that the Appellant had come on record in regard to the clearance of the finished product without payment of duty and has also come on record regarding the waste generated and in fact the admitted position is that the same was cleared on payment of duty from the Appellant's factory. In such a situation it cannot be held that the Appellant had suppressed any fact in regard to the manufacture of waste in question or held back any information. The Appellant's plea, therefore, has to be allowed. The impugned order is therefore set aside and the Appeal is allowed.