TMI Blog2011 (7) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... of denial of MODVAT credit for the period upto 12/09/95 - also it is not in dispute that, during the period from 12/09/95 also, the assessee paid duty of excise on their final marketable product on the basis of assessable value determined by including the cost of packing. The packing activity was treated as part of the manufacture of the finished product and the same fact was acknowledged by the Revenue, which accepted the payment of duty. Reliance placed on Vikram Cement (2006 (1) TMI 130 - SUPREME COURT OF INDIA) and Jaypee Rewa Cement case (2001 (8) TMI 1332 - SUPREME COURT OF INDIA). Extended period of limitation - Held that:- Assessee did not suppress the material fact, though they had 'deliberate intention to save inadmissible c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty paid thereon was availed. This happened during the entire period. In a show-cause notice dated 09/06/99, the department alleged that IOCL had availed inadmissible MODVAT credit on the tin containers during the aforesaid period amounting to Rs.2,46,84,459/- by suppressing the fact that the said containers (input) had been received in their packing unit instead of in their factory premises (blending unit). It was alleged that this fact was suppressed with intention to avail inadmissible MODVAT credit. It was particularly alleged that IOCL had misled the department by filing a declaration on 26/03/94 under Rule 57G to the effect that the tin containers were received in their factory premises. On this basis the extended period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issue of the show-cause notice and this amount was appropriated towards the total demand raised under Rule 57I and the assessee was directed to pay the balance amount of Rs.72,71,372/- for the prior period (01/08/94 to 11/09/95). 3. The present appeal of IOCL is against the confirmation of demand of duty, interest thereon and penalty. The grievance raised in the appeal of the Revenue is that mandatory penalty under Rule 57I (4) was not imposed by the Commissioner for the short period from 23/07/96 to 27/09/96. The department in their appeal points out that the provision for mandatory penalty was brought into force on 23/07/96 and not on 28/09/96. 4. We have examined the records and heard both sides. 5. The learned Counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 also. 6. The learned Counsel has also challenged the impugned demand of duty on the ground of limitation. It is submitted that the entire demand is for a period beyond the normal period of limitation. It is submitted that the learned Commissioner himself dropped the allegation that IOCL suppressed the relevant fact. The adverse finding of the learned Commissioner that IOCL had intention to avail inadmissible MODVAT credit is not, by itself, sufficient for invoking the extended period of limitation under Rule 57I or for levy of interest under Rule 57I(5) or for imposing penalty under Rule 57I(4). Therefore, according to the learned Counsel, the entire demand confirmed against the assessee is liable to be set aside. 7. The learned SDR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, we find that the short question to be dealt with in this case is whether MODVAT credit of the duty paid on the tin containers received in the packing unit of the assessee and used in the manufacture of their marketable product, viz., canned lubricating oil during the material period is liable to be denied to them. It is not in dispute that the blending and packing units were covered by a single registration upto 12/09/95, thereby meaning that both the units were parts of the registered factory. Receipt of containers in the packing unit during the said period was receipt of input in the factory. Hence there is no question of denial of MODVAT credit for the period upto 12/09/95. For the subsequent period, the blending unit remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case and the cases considered by the apex Court. 10. The assessee has a spectacularly strong case on limitation inasmuch as their plea is buttressed by the Ld. Commissioner's own finding that they did not suppress the relevant fact. The only adverse finding of the learned Commissioner, which was recorded for levy of interest and imposition of penalty as well as for invocation of extended period of limitation, is that the assessee had 'deliberate intention to save inadmissible credit'. For invoking the extended period of limitation, levying interest on duty and for imposing penalty, the department alleged in the show-cause notice that the assessee, with intent to avail inadmissible MODVAT credit on containers (input) suppressed the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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