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1. This appeal is directed against the impugned Order-in-Appeal passed by the Collector (Appeals) Central Excise, Chandigarh.

2. Shortly put the facts of the case are that, the appellants M/s. Arsh Castings Pvt. Ltd. are engaged in the manufacture of Steel Ingots. For the manufacture of these Steel Ingots, the appellants have been using, amongst others, inputs namely, goods and materials of Chapter 73 obtained by breaking up of ships, boats and other floating structures, on which duty of excise, both basic as well as special, had been paid at the rates leviable thereon at the material time. It was the case of the Revenue that on 21-12-1990, the Preventive Staff of Chandigarh, Central Excise Collectorate, after checking the statutory records took into possession 20 gate passes against which the appellants had received Iron and Steel Waste/Scrap from M/s. Dee Kay Steel Corporation and M/s. Sonu Iron Store, Mandi, Chandigarh. Investigations made by the authorities concerned indicated that the appellants have received 333.215 MTs of Iron and Steel scrap against the 20 gate passes taken over by them and on this quantity of Iron and Steel scrap, the appellants had availed Modvat credit amounting to Rs. 2,09,925.45 during the period 20-8-1990 to 8-12-1990. The said gate passes so resumed by the officers showed M/s. Anupama Steel Industries, Plot No. 15, M/s. Ganpat Rai Jai Gopal, Plot No. 35, and M/s. Mahadev Industrial Corporation, Plot No. 34 all of Alang (Gujarat) as consignors of the goods. However, as per Revenue, Shri Ashwani Bhai Bhagwan Bhai Gujrati, partner of M/s. Mahadev Industrial Corporation, Shri Sanjeev Satpal Sharma, Director of M/s. Anupama Steel Industries Ltd., and Shri Vipin Ganpat Rai Aggarwal, partner of M/s. Ganpat Rai Jai Gopal in their statements dated 5-1-1991,6-1-1991 and 5-1-1991 respectively stated that the gate passes so taken over from the appellants showing M/s. Sonu Iron Store, Mandi Gobindgarh and M/s. Dee Kay Steel Corporation as consignors had not been issued by their firm. They pointed out that gate passes bearing the same serial numbers as appearing on the gate passes taken over from the appellants had actually been issued by them in favour of certain other parties. Enquiries made at Mandi, Gobindgarh revealed that M/s. Dee Kay Steel Corporation and M/s. Sonu Iron Store, Mandi, Gobindgarh were not in existence and the Sales Tax number mentioned on the invoices issued in the names of these firms were incorrect. On these allegations, a Show Cause Notice to show cause as to why the said amount of Rs. 2,09,925.45 availed as Modvat Credit by the appellants should not be recovered. However, no penalty was proposed in the Show Cause Notice. The appellants hotly contested the Show Cause Notice. However, the Additional Collector of Central Excise, Chandigarh, vide his Order-in-Original No. 56/CE/ADC/91, dated 12-9-1991 confirmed the demand.