Per C.N.B. Nair : The duty demands have arisen on account of two factors -

(a) The appellant took modvat credit on common inputs i.e. inputs which are common for exempt and dutiable pens but did not keep separate accounts or pay 8% on the exempted pens or reverse the credit.

(b) The appellant gave certain special discounts and brought the value of certain pens within the exempted limit.

2. We have perused the records and heard both sides. With regard to the common inputs, the submission of the appellant is that the total amount of modvat credit was only Rs. 5 lakhs and even though a part of it was used in the manufacture of dutiable goods, they have already reversed the entire credit of Rs. 5 lakhs to give a quietus to the dispute. During the hearing of the case, learned Counsel for the appellant has submitted that such reversal of credit meets the requirement of law. Reference in particular was made to Order No. C-II/792/WZB/2002 dated 25.2.2002 of the West Regional Bench of this Tribunal in the case of CCE., Ahmedabad vs. Nirma Ltd. and the decision of the Tribunal in the case of Pushpaman Forgings vs. CCE, Mumbai-VII 2002 (48) RLT 107. Learned Counsel has also pointed out that