2011 (6) TMI 609

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..... manufacture of excisable goods namely Autorims falling under Chapter 87 of the Central Excise Tariff Act, 1985. They also availed CENVAT credit. The proceedings were initiated against them on the ground that they have availed CENVAT credit on defective capital goods and goods were not used in the factory of production. The above proceedings were confirmed by the lower authorities. The appellant challenged the same before the Tribunal and the Tribunal vide its order dated 5.11.2007 decided the case in favour of the appellant. Consequent upon this, the appellant filed a refund claim. The lower adjudicating authority sanctioned the refund claim of Rs.2,18,893/- through CENVAT credit since the reversed was made through CENVAT credit. The appell .....

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..... allowed the availment of CENVAT credit without going into the eligibility criteria on the grounds that there was no legal provision at the time of the issue of the notice for recovery of CENVAT credit availed even if it was purportedly 'erroneously' availed. In other words, the Tribunal had held that the notice had invoked provisions of erstwhile Rule 57I and 57U of the Central Excise Rules, 1944 which were not in vogue at the time of issue (in this case on 08.04.2000). Therefore, on this ground the Tribunal had opined that the recovery could not be made under the said provisions and consequently allowed availment of the CENVAT credit. I also find that the SDR in the case before the Tribunal had submitted that the provisions contained in th .....

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..... overy provisions under erstwhile Rules 57I and 57U were not saved under the new MODVAT Rules is contrary to the provisions of law. I, therefore find that this is a fit case to invoke the principle of "SUB SILENTIO" which was outlined by the Special Bench of the Tribunal in the case of CCE, Rajkot vs. Surgichem reported in 1987 (27) ELT 548 (Tribunal). I therefore relying on this principle, come to the conclusion that the judgment of the Hon'ble Tribunal in this case, did not set a binding precedent as the recovery provisions under Rule 571 and 57U were available at the time of issue of notice by virtue of the saving clause under Section 38A of the Central Excise Act. The availment of credit on the defective capital goods would therefore hav .....

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