Adarsh Kumar Goel, J. - (1.) THIS appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (for short, "the Act") against the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi dated 5.9.2008, Annexure A -5, proposing to raise following substantial question of law: Whether the manufacturer of final products is entitled to deemed credit under Notification No. 58/97 -CE dated 30.08.1997 when the manufacturer/supplier of inputs has not paid appropriate Central Excise duty and given a wrong certificate/no certificate on the body of invoices about duty discharged under Rule 96 ZP of the erstwhile Central Excise Rules, 1944 ?
(2.) THE Assessee was governed by Compunded Levy Scheme under Section 3 of the Central Excise Act, 1944 (for short, "the Act") and was also availing benefits of deemed credit under Rule 57A(6) of the Central Excise Rules, 1944 read with notification dated 30.9.1997. The department noticed that inputs raised by the Assessee were purchased from a unit which itself was governed under Section 3A of the Act and had not paid ad valorem excise duty, on account of liability for payment of excise duty having been discharged under the Compounded Levy Scheme. Accordingly, Show Cause Notice was given for reversal of deemed credit and for penal action which was followed by Order -in -Original dated 29.12.2003 against the Assessee. On appeal, the said order was set aside vide Order -in -Appeal dated 30.9.2005 following judgment of this Court in Vikas Pipes v. CCE : (2003) 158 ELT 680 holding that where declaration is given by the supplier of goods that inputs had suffered excise duty, the remedy of the department is to proceed against the supplier for not having discharged duty liability and not against the person who used the inputs and claimed credit. The finding recorded in the Order -in -Appeal is as under: I have carefully examined the case records including the Appellants submissions made in writing and at the time of personal hearing and cross -objection of the Respondents. I observe that the contention of the Appellant No. 1 is that the departmental appeal has been filed on the ground that Respondent has wrongly facilitated the buyers to avail deemed credit. That the Respondent has duly discharged the total duty liability of the relevant period i.e. September 97 to March 98. The certificate issued by the Range Superintendent in this regard is also submitted. Moreover, ACP order for the subsequent period has been set -aside by way of remand by the Hon'ble CEGAT in the case of Mohinder Steel v. CCE, Chandigarh : 2002(145) ELT 290 (Tri.LB) Further, it is an undisputed fact that Rule 96ZP is the provision under which duty was required to be discharged by the manufacturer of Iron & Steel Products under compounded levy scheme and accordingly duty liability is to be discharged till the end of month and with interest thereafter. As under the compounded levy scheme the excise liability is based on the annual capacity of production and is not discharged at the point/time of removal but according to Rule 96 ZP, the declaration to the effect "appropriate duty discharged" will tantamount to false declaration. Therefore, the Respondent input manufacturer has correctly declared "Goods cleared under Rule 96ZP(3)". Similar issue was decided by the Hon'ble Tribunal in the case of Delhi Steel Industries v. CCE, Chandigarh : 2002(149) ELT 673 wherein it was observed that there is no dispute of the legal position that any discharge of liability under Rule 96ZP is a discharge of duty liability under Section 3A of the Central Excise Act. Therefore, the invoices bearing declaration "duty liability discharged under Rule 96ZP" satisfies that conditions of the notification. Moreover, the Hon'ble Punjab & Haryana High Court in the case of Vikas Pipe v. CCE, Chandigarh : 2003 (158) ELT 680, has put to rest the issue involved by categorically holding that invoices certifying that inputs have sufficient and no further evidence to show discharge of duty is required. The view taken by the Appellate Authority has been affirmed by the Tribunal.
(3.) WE have heard learned Counsel for the Appellant.;