TMI Blog2005 (2) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 5-11-2004 which contains the full facts of the case. 2.1 The proceedings initiated proposed recovery of : (a) Duty liability to the tune of Rs. 20,33,720/- on the reimbursement, received by applicant company towards additional expenses incurred for import of raw materials by air. (b) Differential duty to the extent of Rs. 80,447 on account of price escalation. (c) Duty liability of Rs. 4,69,993 on notional interest waived Rs. 29,87,454/-, part of Rs. 5 crores taken as loan from HMIL at 18% interest. (d) Modvat credit to the extent of Rs. 29,24,943/- availed on capital goods like Moulds and Dies supplied by M/s. HMIL on the ground that the applicant company do not have ownership of the goods. 2.2 The applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was taken were in order and conditions prescribed for availing the credit were satisfied. To support his claim that ownership is not a pre-requisite for entitlement of credit in respect of capital goods, he cited the decision of CEGAT in (a) HST Automotives Ltd. v. CCE, Chennai, 2004 (163) E.L.T. 116 (T) = (Order No. 575/2003, dated 11-7-2003) (b) Sharda Motors Ltd. v. CCE, Chennai II, 2002 (150) E.L.T. 759 (T) = (Order No. E/327/2002, dated 6-3-2002) (c) Vimala Rolling Mills Pvt. Ltd. v. CCE, Delhi (1997 20 RLT 753 CEGAT NZB). He submitted that since the applicant had discharged duty liability in respect of two issues immediately after the discrepancies were pointed out and long before the issue of show cause notice, interest under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore there is no nexus between the price and the loan. In view of this the departmental attempt to load the assessable value with notional interest waived on the part loan is not legally sustainable, in terms of the Apex Court s judgment in the case of CCE, Mumbai-III, v. ISPL Industries Ltd. 2003 (154) E.L.T. 3 (S.C.). Coming to the department s contention regarding the credit taken on capital goods, we find that in the case of M/s. HSI Automotives Ltd., the CESTAT vide its 2004 (163) E.L.T. 116 (Tribunal) = Order No. 575/2003, dated 11-7-2003 referred to 2004 (176) E.L.T. 881 (T) = Boards Circular No. 263/8/89, dated 1-3-89 on the very issue of grant of Modvat credit to the capital goods even in circumstances where the ownership does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osure of duty liability and cooperated with the proceedings in the Settlement Commission, their request for immunities merits favourable consideration. 8. Accordingly the case is settled under sub-section (7) of Section 32F of the Central Excise Act, 1944 as per the terms and conditions mentioned below : - a. The duty liability is settled at Rs. 21,14,167/-. Since the applicant company has paid this amount, no further duty is payable by them. b. Immunity from interest, penalty as proposed in the SCN as well as prosecution under the provisions of the Central Excise Act, 1944 is granted. 9. The above immunities are granted in terms of sub-section (1) of Section 32K of the Central Excise Act, 1944. Attention of the applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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