2001 (1) TMI 172 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit by Assistant Commissioner.
2. Imposition of penalty by Assistant Commissioner.
3. Appeal by Revenue against Commissioner (Appeals) order.

Analysis:

Issue 1: Disallowance of Modvat credit by Assistant Commissioner
The case involved the disallowance of Modvat credit of Rs. 1,58,071/- by the Assistant Commissioner, which was initially taken by the respondent based on invoices issued by Steel Authority of India Ltd. The Deputy Commissioner disallowed the credit on the grounds of invalid documents, leading to the reversal of the credit by the respondent. Subsequently, the Assistant Commissioner allowed the party to avail the credit under amended provisions of Rule 57H, which was challenged by the Revenue. The Tribunal noted that the Assistant Commissioner's order was passed without jurisdiction as it was in the nature of a review of the Deputy Commissioner's order, which was final and binding. Additionally, the re-credit taken by the respondent was found to be inadmissible due to time-bar constraints under Rule 57G(5), as it was taken beyond the prescribed period from the date of issue of invoices.

Issue 2: Imposition of penalty by Assistant Commissioner
In addition to disallowing the Modvat credit, the Assistant Commissioner imposed a penalty of Rs. 10,000/- on the respondent. The Tribunal did not delve into the specifics of this penalty in the judgment, focusing more on the disallowance of credit based on jurisdictional and time-bar considerations.

Issue 3: Appeal by Revenue against Commissioner (Appeals) order
The Revenue appealed against the Commissioner (Appeals) decision to allow the respondent's appeal. The Tribunal found that the Commissioner (Appeals) had erred in setting aside the Assistant Commissioner's decision solely on the ground that it was beyond the scope of the show-cause notice. The Tribunal concluded that the Assistant Commissioner's decision was not entirely beyond the scope of the notice, as it also addressed the time-bar issue, thereby allowing the Revenue's appeal and setting aside the impugned order.

In summary, the Tribunal set aside the impugned order disallowing the Modvat credit and imposing a penalty, ruling in favor of the Revenue's appeal based on jurisdictional and time-bar considerations, and highlighting the errors in the Commissioner (Appeals) decision.