2010 (6) TMI 682 - AT - Central Excise

Summary

Issues involved: Duty demand confirmation, relevance of reconciliation statement, validity of show cause notice u/s Rule 57-I.

The judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of duty demand confirmation against the appellant in the second round of litigation. The key question was whether the appellants were obligated to reverse the duty on lost quantity not issued by the manufacturer of finished goods, and if the reconciliation statement submitted had any bearing on the confirmed demand.

Regarding the validity of the show cause notice u/s Rule 57-I, the learned Advocate for the appellant argued that the notice was flawed as it was issued under the old Modvat Rules while the Cenvat Credit Rules, 2000 were in force. Citing a relevant case law, it was emphasized that the law applicable at the time of the notice must be invoked. Since Rule 57-I was not in existence when the notice was issued, it was deemed unsustainable. The Tribunal concurred, noting that the show cause notice invoked provisions that had been substituted by Cenvat provisions prior to the issuance of the notice. As such, the notice was deemed invalid, leading to the setting aside of the impugned order and allowing the appeal solely on this ground.