- (1.) The present Appeal has been filed under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the 'Act') against the order dated 23-12-2004 and has been admitted by this court on the following Substantial Question of Law:- (i) Whether deemed credit in terms of Notification No. 58/97, dated August 30, 1997 is admissible to the inputs user on the basis of Invoice on which appropriate duty has not been paid by the input suppliers under Section 3A of the Central Excise Rules, 1944, read with Rule 96ZP(3) of the erstwhile Rules, 1944? Briefly stated, the facts giving rise to the present appeal are as follows:- The respondent-assessee is a private limited company and is engaged in the business of manufacture and sale of chains and parts thereof. During the period 1998-99, the respondent-assessee has availed facility of Modvat Credit provided under Rule 57A of the Central Excise Rules, 1944 (hereinafter referred to as the 'Rules'). In the course of scrutiny of the Modvat documents for the quarter ending June 1998, it transpires that the respondent-assessee had availed the Modvat Credit/ Deemed Credit of Rs. 24,664/-. The Superintendent, Central Excise, Saharanpur found that Modvat Credit amounting to Rs. 24,664/- against the invoices issued by the manufacturers who cleared the goods under Section 3A of the Act, did not fulfil the condition as laid down under the Notification No. 58/97-CE., dated 30-8-1997 issued under Rule 57A of the Rules as the invoices did not contain the declaration that 'Appropriate of the duty of excise has been paid on such goods under the provisions of Central Excise Act, 1944' as required under Condition No. 4 of the notification dated 30-8-1997 and therefore, it was inadmissible. A show cause notice was issued and a reply was called. The respondent-assessee submitted his reply stating therein that the Modvat credit has rightly been availed and it does not call for any disallowance. The Deputy Commissioner, Central Excise, Saharanpur after making investigation vide order dated 18-11-2000 confirmed the demand of Rs. 24,664/- on the finding that claim of Modvat Credits have been wrongly availed and also imposed penalty of Rs. 12,000/-. The respondent-assessee feeling aggrieved preferred an appeal before the Commissioner (Appeals) (Customs and Central Excise), Meerut who by the order dated 30-7-2003, confirmed the demand regarding the Modvat Credit. Feeling aggrieved, the respondent-assessee filed an appeal before the Tribunal, which was allowed by the order dated 23-12-2004 and addition was deleted.
(2.) We have heard Sri R.C. Shukla, learned Senior Standing Counsel appearing for the Department.
(3.) The learned counsel submitted that the Tribunal has erred in law in allowing the claim of Modvat credit in as much as the declaration furnished by the respondent-assessee do not confirm to the notification dated 30-8-1997 as the specific Condition No. 4 of the said notification had not been complied with. He invited the attention of the court to the order passed by the Assessing Authority, i.e. the Deputy Commissioner, Central Excise, Saharanpur and submitted that the manufacturer from whom the respondent-assessee had purchased the goods had not discharged its liability and only a part of the amount under the compounded scheme availed by the manufacturer, has been paid.;