2008 (12) TMI 488 - AT - Central Excise

Summary

Issues:
Reversibility of input credit for dutiable and exempted goods, accumulation of unutilized credit, denial of refund claim, repetitive litigation due to inaction of Revenue.

Analysis:
In the first round of litigation, the Appellant faced a demand to reverse Modvat credit based on the value of dutiable and exempted goods, leading to accumulation of credit. The Tribunal set aside the demand but the Department failed to devise a procedure, causing further delays and financial hardship for the Appellant.

In the second round of litigation, the Tribunal directed the Appellant to follow specific guidelines for credit reversal based on the law established by the Apex Court. Despite compliance, delays in decision-making by the Department continued, resulting in unutilized credit balance.

The third round of litigation involved the denial of refund of the unutilized credit balance by the Deputy Commissioner. The Tribunal dismissed the appeal, advising the Appellant to approach the Jurisdictional Authority for refund claims.

In the fourth round of litigation, the Appellant sought a refund again, but the Authority rejected the claim, leading to further appeals and show cause notices.

The current fifth round of litigation challenges the rejection of the refund claim by the Authority. The Appellant argued that the sufferings were due to the Revenue's inaction and the imposed restraints on credit utilization. The Tribunal noted the undisputed figures of unutilized credit and the withdrawal of restraints by the Revenue, ultimately allowing the Appellant's appeal to utilize the credit for duty payment.

The Tribunal found that the Appellant had faced unnecessary sufferings due to Revenue's inaction and lifted restraints. Consequently, the impugned order rejecting the refund claim was set aside, allowing the Appellant to use the credit for duty payment.

In conclusion, the Tribunal's decision favored the Appellant, emphasizing the Revenue's responsibility to resolve disputes promptly to prevent undue hardships on taxpayers.