2006 (12) TMI 360 - AT - Central Excise

Summary

Issues:
1. Allegation of irregularly availing Modvat credit from May 1999 to November 2001.
2. Show cause notice issued after a lapse of one year.
3. Proceedings against job worker for Modvat credit and subsequent proceedings against the assessee.
4. Applicability of Tribunal's judgment in favor of job worker on the Revenue's proceedings against the appellants.
5. Barred by time defense and reliance on Supreme Court judgments.

Analysis:
1. The appeal stemmed from an Order-in-Appeal confirming an Order-in-Original against the appellants for allegedly irregularly availing Modvat credit from May 1999 to November 2001. The Revenue proceeded against the job worker for availing Modvat credit on inputs sent by the assessee, but the Tribunal had set aside the demands in a previous case involving the job worker. Subsequently, the Revenue initiated proceedings against the appellants, leading to the current challenge.

2. The appellant's counsel argued that the Revenue cannot proceed against the appellants once the Tribunal has settled the issue in favor of the job worker. Additionally, it was contended that the demand is time-barred as all relevant facts were known to the Department during previous proceedings. The counsel relied on judgments by the Apex Court in the cases of Amco Batteries Ltd. and Nizam Sugar Ltd.

3. The learned JDR reiterated the findings of the Commissioner (Appeals) without introducing new arguments or perspectives.

4. Upon careful consideration, the Tribunal noted that the Revenue had already pursued recovery from the job worker for the same issue, which was resolved in favor of the job worker. The Tribunal emphasized that the Revenue, having lost the case against the job worker, cannot initiate identical proceedings against the manufacturer, citing the precedent set by the Apex Court in the case of Amco Batteries Ltd. The Tribunal concluded that since the facts were known to the Department and there was no suppression of facts, the demands against the appellants were time-barred. Consequently, the appeal was allowed with any necessary consequential relief.

5. The judgment highlighted the importance of the Tribunal's previous decision in favor of the job worker and the subsequent inability of the Revenue to reinitiate proceedings against the appellants. The defense of being time-barred due to the known facts and reliance on relevant Supreme Court judgments played a crucial role in the Tribunal's decision to allow the appeal.