M. Katju, J. - (1.) This is a reference under Section 35G(3) of the Central Excise and Salt Act, 1944 in which the following questions have been referred to us for our opinion: (i) Whether the Hon'ble Tribunal was justified in holding that deemed credit as per letter F. No. Ts/36/94-TRU dated 1.3.94 can be denied on the ground that the Inputs (rerollable material like old and used rails, wheels, crossties, sleepers etc.) were clearly recognizable as non-duty paid when the deemed credit order dated 1.3.94 did not contain such a clause (stipulation); (ii) Whether an item which has already suffered excise duty is required to suffer excise duty again by passage of time without any chance in the nature and character of that particular item; (iii) Whether the Superintendent is the competent authority under the Excise Act to recover the Modvat Credit wrongly availed of; and (iv) Whether the facts and ratio of the case of Machine Builders and Org. v. Collector of central Excise is applicable in the case of the applicants.
(2.) Heard learned Counsel for the parties Shri A.P. Mathur for the assessee and Shri S.P. Kesharwani for the department.
(3.) In the manufacture of M.S. Bars and Rods falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 the assessee is using re-rollable materials of Mild Steel in the manufacture of the final product. The assessee availed the benefit of deemed credit order dated 17.7.1992, but thereafter a show cause notice was issued by the Central Excise Department seeking to recover the amount, of deemed credit on the ground that the re-rollable materials on which credit has been taken was not clearly recognizable as duty paid.;