Judgment G.S.Singhvi, J. 1. Whether Respondent No. 1 is entitled to the benefit of deemed Modvat credit in terms of Notification No. 208/83-C.E., dated 1-8-1983 issued by the department is the question which arises for determination in this petition filed under Section 35H(1) of the Central Excise Act, 1944 (for short, the Act). 2. Respondent No. 1 M/s. R.H. Industries, Mohali is engaged in the manufacture of parts and accessories of motor vehicles falling under Chapter Heading 87.08 of the Central Excise Tariff Act, 1985. It took credit on inputs i.e. . Angles and M.S. Flats during the period from April, 1987 the July, 1987 under Government of India Ministry of Finance Order F. No. B22/5/87-TRU, dated 7-4-1986. The Assistant Commissioner issued notice to Respondent No. 1 proposing to recover the Modvat credit availed by it. After considering its reply, the adjudicating authority confirmed the proposal vide its order dated 6-9-1988. The Collector (Appeals) accepted the appeal filed by Respondent No. 1 and quashed order dated 6-9-1988. Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short, the Tribunal) upheld the order of the Collector (Appeals) and dismissed the appeal filed by the department. The Tribunal relied on the order passed by a Larger Bench in the case of Machine Builders v. Collector of Central Excise, Bolpur and held that the benefit of deemed credit is admissible to Respondent No. 1. 3. Shri M.S. Guglani, Counsel for the petitioner relied on the judgment of a Division Bench of -this Court in Upper India Steel Manufacturing and Engineering Co. Ltd. v. Union of India and argued that the orders passed by the Collector (Appeals) and the Tribunal may be declared illegal and the latter may be directed to refer the following question of law for the opinion of this Court: Whether the Hon ble Tribunal was right in allowing the deemed Modvat credit in respect of the inputs purchased by the noticee from the open market, clearly recognisable as being the non-duty paid or charged to nil rate of duty vide Notification No. 208/83-C.E., dated 1-8-1983 as amended. 4. Shri V.M. Gupta, learned Counsel for respondent No. 1 relied on the judgments of the Supreme Court in Collector of Central Excise, Chandigarh v. Decent Dyeing Co. 4. Shri V.M. Gupta, learned Counsel for respondent No. 1 relied on the judgments of the Supreme Court in Collector of Central Excise, Chandigarh v. Decent Dyeing Co. and of the Full Bench of the Tribunal in Machine Builders case (supra) and argued that benefit of deemed Modvat credit cannot be denied to his client. 5. We have given serious thought to the respective arguments and have perused the record. We have also gone through the judgments relied upon by the learned Counsel for the parties. 6. In Upper India Steel Manufacturing and Engineering Co. Ltd. case (supra), a Division Bench of this Court approved the view taken by the learned Single Judge that the burden to establish the conditions specified in Government of Indias order dated 7-4-1986 was on the manufacturer. The Division Bench rejected the argument that the benefit of deemed Modvat credit is admissible to the manufacturer on the inputs and it was for the department to show that inputs used in the manufacturing of the final products fell within the scope of the exceptions. 7. In Collector of Central Excise, Chandigarh v. Decent Dyeing Co. (supra), the Supreme Court considered the question as to whether the onus to prove the entitlement to deemed Modvat credit was on the manufacturer of it was for the department to prove otherwise and held :- Excise is duty on manufacture. The liability payment of this duty is on the manufacturer. Under excise system, no goods can be removed from the place of manufacture without first paying the excise duty. Therefore, a purchaser can presume that goods are duty paid, it would be intolerable if the purchasers were required to ascertain whether excise duty had already been paid as they have no means of knowing it. Therefore, it cannot be the responsibility or the burden of the respondent to prove that the duty on base yarn had already been paid. When the appeal was filed before the Collector, the respondent had disclosed the names of the persons from whom they had received the yarn as also the names of the manufacturers enclosing the copies of the relevant record. But even then the revenue had not chosen to verify these facts and the Collector (Appeals) had passed his order on the basis that it was for the respondent to prove the actual payment of base duty. This is not the proper approach. But even then the revenue had not chosen to verify these facts and the Collector (Appeals) had passed his order on the basis that it was for the respondent to prove the actual payment of base duty. This is not the proper approach. 8. In Machine Builders case (supra), the Full Bench of the Tribunal interpreted various orders issued by the Government of India including order dated 7-4-1986 and observed :- An incidental question arising in relation to cases of conditional exemption is, on whom is the burden of establishing the fact-situation? In CCE v. Decent Dyeing Co., the Supreme Court dealt with the case of a notification granting exemption of so much of the duty as is in excess of the duty on base yarn if not already paid plus Rupees ten per Kg. The assessee had disclosed the names of traders from whom he made the purchases of base yarn and names of manufacturers and also enclosed copies of relevant record. The Revenue did not verify the facts and proceeded on the basis that it was for the assessee to prove actual payment of base yarn duty. The Supreme Court held this was not a proper approach. It was not as if the assessee alone should have special knowledge of the fact of payment of duty. It was therefore for the Revenue to prove non-payment. This principle has been followed by the Tribunal in Kapsons Electro Stampings and Rapsri Engineering Industries Pvt. Ltd. In Upper India Steel Manufacturing and Engineering Co. Ltd. v. Union of India, the Punjab and Haryana High Court observed :- It has been stated that the notification P-3 is in the nature of an exception. The normal rule of construction is that if a person wants to avail of the exception, it is for him to make out a case showing that he is covered by the exception. The issuance of the notification An-nexure P-3, dated April 7, 1986 and the prescription of the three exceptions reproduced above, clearly indicates that the matter has not been left to presumptions. It is regulated by positive rules, inter alia, by notification issued under Rule 57G(2). The issuance of the notification An-nexure P-3, dated April 7, 1986 and the prescription of the three exceptions reproduced above, clearly indicates that the matter has not been left to presumptions. It is regulated by positive rules, inter alia, by notification issued under Rule 57G(2). The petitioner in order to avail of the deemed credit has to take a stand in the various returns which are required to be filed, it is for the department to verify the stand thus taken and either to alia, or contest the same. I am of the considered view that there is no general rule that the burden is no the department to show that a certain input is recognizable as being non-duty paid or charges to nil rate of duty. In my view, the initial burden is on the manufacturer claiming deemed credit to take a definite stand with regard to a certain input, it is then open to the department to accept that claim or to contest the same. (Emphasis supplied) The above observations have been explained by the appellate Division Bench of the Court in the judgment reported in in the following words :- The grievance of the appellant is that the learned single judge has placed the burden on the manufacturers is totally misconceived. According to the learned single judge, the manufacturer has to take a definite stand. We find that the view taken by the learned single judge is wholly unexceptionable. The Punjab and Haryana High Court was not, in the above case, dealing with a notification exempting goods from excise duty subject to conditions. A manufacturer who seeks the benefit of the Government order issued under proviso to Rule 57G(2) must naturally say so, that is, take definite stand and to the extent necessary produce documents and marshal arguments and logic to show that he is so entitled to the benefit of the order, he should also take a definite stand that his case does not fall within the exceptions enumerated in the explanation to the Government order. Where there is an exemption notification, and if ex facie the exemption is attracted in regard to the inputs used by him, he should take a stand as to why the notification is not attracted, it is then for the Revenue to verify the claim by conducting such enquiry as is necessary, and pass appropriate orders. Where there is an exemption notification, and if ex facie the exemption is attracted in regard to the inputs used by him, he should take a stand as to why the notification is not attracted, it is then for the Revenue to verify the claim by conducting such enquiry as is necessary, and pass appropriate orders. Where the exemption notification is conditional, the assessee has to take a stand that the conditions are not satisfied in the instant case and it is for the Revenue to conduct enquiry and arrive at a correct conclusion. The first exception in the Government order dated 7-4-1986 is where the credit has already been availed of under any Rule or notification. To show that credit has not been taken, he has to rely on documents in his custody or power. If the reasons show that he has already availed credit, it will be for the Revenue to show that the claimant has already availed credit. The second exception is where the inputs are recognizable as being non-duty paid or charged to nil rate of duty. In this regard also, the assessee has to take a stand and it is for the Revenue to satisfy itself that the exception is not attracted. The third exception turns specifically on the existence of documentary evidence to show that the reduced duty has been paid and it is for the assessee to produce the documents and prove the positive fact required to be proved. But basically it is for the person who sets up an exception to prove it. The mere existence of an exemption notification is not sufficient to show that the inputs is wholly exempt from duty or clearly recognised as not being duty paid or charged to nil rate of duty. This consequence may automatically follow in the case of unconditional exemption once it is shown that the inputs in question are attracted by the notification. In the case of conditional exemption, unless it is shown that all the conditions are satisfied in a given case, it cannot be stated with certainty that the inputs are wholly exempt or are clearly recognizable as non-duty paid or charged to nil rate of duty. In the case of conditional exemption, unless it is shown that all the conditions are satisfied in a given case, it cannot be stated with certainty that the inputs are wholly exempt or are clearly recognizable as non-duty paid or charged to nil rate of duty. It is therefore for the Revenue by conducting necessary enquiry (and it shall be the duty of the assessee to co-operate) to see if the conditions are satisfied and the exemption notification has fully taken effect in regard to the inputs in question. Revenue cannot be heard to say that it is for the assessee to show that the conditions are not satisfied and since he had failed to do so, the exemption must be regarded as having taken effect. It has to be appreciated that in the generality of such cases, the person who clears the inputs in not the assessee, but the manufacturer of the inputs and the assessee might not have purchased the same directly from the manufacturer but might have purchased from the Bazar. When the controversy arises in the appellants forum it is for the Revenue satisfy the appellate forum that the conditions are satisfied in the given case and that the exemption has taken effect. It is contended for the assessee that even if the inputs used by them were not duty paid on account of exemption, if the inputs were manufactured from duty paid goods, they are entitled to deemed credit on their inputs. The provisions in Rule 57A definitely requires that a person in order to be entitled to credit on duty paid on specified in puts brought to his factory, must use the inputs in or in relation to the manufacture of specified final products. If the inputs are exempted from duty, they are not duty paid and hence no credit is admissible. Credit of duty paid not on inputs of the assessee but on raw materials by using being which the inputs are manufactured may be admissible to the manufacturer of inputs. No credit can be enjoyed by the user of the inputs, of duty not paid on the inputs, but on the raw materials of the inputs. Duty paid on the raw materials of inputs cannot be credited to the account of purchaser of the inputs. No credit can be enjoyed by the user of the inputs, of duty not paid on the inputs, but on the raw materials of the inputs. Duty paid on the raw materials of inputs cannot be credited to the account of purchaser of the inputs. Assessee in these cases cannot seek credit for duty paid not on their inputs but on raw materials for the inputs. Payment of duty, down the line at some earlier stage cannot go to the benefit of the assessee. 9. In our opinion, the law laid down by the Supreme Court in Collector of Central Excise v. Decent Dyeing Co. (supra) which has been followed by the Full Bench of the Tribunal is binding on this Court and the contrary view expressed by the Division Bench in Upper India Steel Manufacturing and Engineering Co. Ltd. case (supra) without considering the judgment of the Supreme Court cannot be read as paying down correct law. 10. In the premise aforesaid, we hold that the impugned order passed by the Collector and the Tribunal do not suffer from any legal infirmity and no substantial question of arises for determination by this Court. Hence, the petition is dismissed.