Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Customs Customs + Commissioner Customs - 1998 (2) TMI Commissioner This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

1998 (2) TMI 281 - Commissioner - Customs


Issues:
1. Availing benefits under DEEC Scheme and input stage credit under VABAL Scheme.
2. Compliance with conditions for reversal of Modvat credit under VABAL Scheme.
3. Interpretation of Customs Notification 203/92 and Rule 57F(4) regarding Modvat credit.
4. Calculation of Modvat reversal based on compounded rubber and input stage credit.
5. Effective hearing and consideration of arguments by the Assistant Commissioner.

Analysis:

1. The case involved manufacturers exporting goods under the DEEC Scheme while availing benefits under Notification No. 203/92-Cus. The issue arose when the department noticed that the manufacturers were also availing input stage credit under the VABAL Scheme, contrary to the conditions. The Assistant Commissioner calculated the amount to be reversed, leading to a dispute over the actual credit to be reversed.

2. The Assistant Commissioner found that the manufacturers failed to comply with the conditions for reversing Modvat credit under the VABAL Scheme. He noted discrepancies in maintaining records, lack of distinction between duty-free imported inputs, and a presumption that the manufacturers adopted norms under the DEEC Scheme to calculate actuals. The Assistant Commissioner concluded that no compliance certificate could be issued.

3. The appellants argued that they exported goods under bond, allowing Modvat credit utilization for home consumption duty payments. They contended that they should not be compelled to reverse the Modvat credit under VABAL exports. They also highlighted the interpretation of Customs Notification 203/92 and Rule 57F(4) to support their position.

4. The appellants further explained their manufacturing process involving different factories and the transfer of compounded rubber. They emphasized the reduction of Modvat credit on compounded rubber to input stage credit to avoid discrimination. The appellants presented detailed arguments on the calculation of reversible amounts and the lack of consideration by the Assistant Commissioner.

5. The Commissioner, after considering the submissions, found merit in the appellants' arguments regarding input stage credit and the reduction of Modvat on compounded rubber. The Commissioner directed the Assistant Commissioner to rework the demand, ensuring a reasonable opportunity for the appellants to be heard. The lack of discussion on the calculation method in the original order was noted, leading to a remand for de novo consideration.

In conclusion, the judgment highlighted the importance of proper compliance with scheme conditions, accurate calculation of Modvat credit, and the need for effective hearings in such matters. The case was remanded for further consideration based on the Commissioner's observations and directions.

 

 

 

 

Quick Updates:Latest Updates