Shri N.K. Sodhi, J. - (1.) M /s. Upper India Steel Manufacturing and Engineering Company Limited, Dhandari Kalan, Ludhiana is engaged in the manufacture of steel ingots and iron and steel rolled products. It purchased scrap of iron and steel from the market. The assessee claimed deemed modvat credit on steel scrap purchased from the market. The claim of the assessee was rejected by the Collector. Feeling aggrieved it went up in appeal before the Tribunal and the question that arose for the consideration of the Tribunal was whether the purchases of steel and iron scrap were covered by bills/challans and whether those bills/challans had been produced before the authorities for claiming modvat benefit. This issue was decided by the Tribunal in paragraph 6 of its order dated 5.9.1997 which reads as under : - "We find that the appellants have taken a stand. We have seen the findings of the Collector in the impugned order. Our attention has also been drawn to the submissions made by the appellants before the Collector. One of the submissions was that 'It is accordingly requested that field formations may be directed to verify the quantity of 'iron scrap' as well as of 'steel scrap' received by the unit from the record before any decision is taken on this show cause notice. Further the appellants contended that the quantity of scrap iron and quantity of scrap of steel is clearly variable from the invoices received by the unit wherein the supplier has indicated Iron Scrap or Steel Scrap. This clearly shows that the appellants had challans/bills and had taken a stand that they have taken Modvat credit on the strength of these challans/bills and they offered them to verification, if authorities so desire. We find that identical issue came up in the decision cited and relied upon by the appellants and the appellants in those cases were allowed deemed Modvat credit because the assessee had referred verification of challans/bills on the strength of which deemed Modvat credit was taken. Having regard to the facts of the case and the case law cited and relied upon by the appellants, we hold that the Modvat credit was admissible to the appellants. In the result, the appeal is allowed with consequential relief in accordance with law."
(2.) THE department then moved an application before the Tribunal for referring the following question of law to this Court for its opinion : - "Whether the burden of proof that the goods are not non -duty paid in the case of conditional exemption is not on the assessee in view of the Hon'ble Punjab and Haryana High Court's order dated 4.12.1989 in C.W.P. No. 6599 of 1986 filed by M/s. Upper India Steel Manufacturing and Engineering Co. Ltd., Ludhiana and in view of the fact that at the relevant time the assessee have not properly indicated in the RG 23A Part I, the source and quantity of the waste and scrap of iron and steel except making a consolidated entry regarding the quantity received for the whole month - The Tribunal rejected the application. Hence, the present petition under Section 35G of the Central Excise Act, 1944 for a mandamus to the respondents to refer the aforesaid question of law to this court.
(3.) WE have heard counsel for the parties and perused the findings recorded by the Tribunal. We are satisfied that the question as claimed by the department does not arise out of the order of the Tribunal. The Tribunal has nowhere held that the onus of proving whether duty had been paid on inputs lies on the department or on the assessee. In fact, this issue did not arise before the Tribunal and the Tribunal found as a fact that the assessee had purchased scrap iron and steel from the market and produced the challans and bills for their verification before the department. In view of these findings, the present application is misconceived and the same stands dismissed.;