R. Jayaraman, Member (T)

1. All the aforesaid appeals arise out of the order of the Collector of Customs (Appeals) considering the identical issue and hence they were heard together and disposed of by this common order.

2. The brief facts for purpose of disposal of these appeals can be stated as below:

The appellants are the manufacturers of spring of iron or steel. For manufacture of this final product, they received inputs viz. steel flats exceeding 5 mm in thickness from outside. They had applied for availment of modvat credit in respect of the inputs and the permission for availment of modvat credit was granted. The Government of India, Ministry of Finance under order F. No. B. 22/5/86-TRU dated 7-4-1986, issued in pursuance of the 2nd proviso to Rule 57G(2) of the Central Excise Rules, allowed deemed credit in respect of inputs purchased from outside and lying in stock on or after 1-3-1986 with the manufacturers of the final product. In their case the deemed credit in respect of the steel flats exceeding 5 mm thickness was taken at the rate of Rs. 365 per M.T. However, the department issued 4 show cause notices dated 2-9-1986; 30-3-1987; 23-7-1987 and 4-12-1987. The objection raised by the department in the aforesaid show cause notices is common viz. that the inputs - steel flats have been entirely purchased from M/s. G.D. Industrial Engineers, Faridabad, who are the manufacturers of the said flats and they have cleared the flats without payment of duty under Notification No. 208/83. It was, therefore, alleged in the show cause notices that the input was clearly recognisable as those cleared at 'Nil' rate of duty or exempted from central excise duty. Hence availment of deemed credit on such flats is irregular in terms of the Government of India's order referred to above. In the adjudication proceedings initiated by the Asstt. Collector, he confirmed the demands issued through the aforesaid 4 show cause notices and passed 4 orders demanding for a total amount of duty of Rs. 58,336.27. The appellants took the matter by way of appeals before the Collector (Appeals), who has rejected the appeals. The present appeals are against the orders of the Collector (Appeals).

3. Shri Sheth, the learned advocate, on behalf of the appellants, contended that as per the Government of India's order, deemed credit is to be denied only if such inputs are clearly recognisable as being non-duty paid or charged to 'nil' rate of duty. He took us through the relevant portion of the order dated 7-4-1986, which reads as below:

"The inputs specified in column (2) of the Table hereto annexed and falling under the heading Nos. of the Schedule to the Central Excise Tariff Act 1985 (5 of 1986) specified in the corresponding entry in column (3) of the said Table, purchased from outside and lying in stock on or after 1-3-1986 with the manufacturers manufacturing the final products specified in the Notification No. 177/86-C.E., dated the 1st March, 1986, may be deemed to have paid the specified duty at the rate specified in column (4) of the said Table and a credit of the specified duty in respect of such inputs used in the manufacture of the said final products in which the duty of excise is leviable either in whole or in part, may be allowed at the rate specified in column (4) of the said Table, without production of documents evidencing payment of duty. No such credit shall, however, be allowed -

(i) If in respect of any input, the credit of specified duty paid thereon has already been availed of under any rule or notification granting such credit;

(ii) if such inputs are clearly recognisable as being non-duty paid or charged to nil rate of duty; or

(iii) if in respect of any inputs where the reduction of duty is provided under the proviso to Notification No. 55/86-C.E., dated the 10th February, 1986 is claimed on the ground that the inputs have been manufactured with the aid of electric furnace and documentary evidence exists to show that the reduced duty