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M/s ITC Ltd. Versus The Customs Excise & Service Tax Appellate Tribunal

2015 (12) TMI 737 - ANDHRA PRADESH HIGH COURT

Reversal of MODVAT Credit - input credit on felts and wires for the period from 29.07.1987 to 09.07.1992. - Held that:- For the period 29.07.1987 to 09.07.1992 the appellant did claim MODVAT credit treating the felts and wires as inputs. But the same was denied on the interpretation of the Rule at that point of time. The decision of denying the input credit came to be challenged by the appellants by resorting to the provisions under the Act and Rules and the denial order came to be affirmed by t .....

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ant is concerned the decision intra parties is binding and there is no escape from the same.

Appellants themselves treated the period from 01.03.1987 onwards as distinct would go to show that the declaration filed on 07.07.1992 is only restricted to their claim for availing MODVAT credit on felts and wires treating them as inputs, especially in the light of the order of the Tribunal in Straw Products Ltd., case (1991 (10) TMI 139 - CEGAT, CALCUTTA ). In other words, the claim of the a .....

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aim petition in the letter dated 07.07.1992 it cannot be presumed that the same was in issue before the authorities and adjudicated upon. - order of the Tribunal does not call for any interference and the same is in order - Decided against the assessee. - CEA No. 27 of 2005 - Dated:- 13-8-2015 - G. Chandraiah And Challa Kodanda Ram, JJ. For the Appellant : Smt M. Bhaskara Lakshmi For the Respondent : Sri V Gopala Krishna Gokhale JUDGMENT ( Per Hon ble Sri Justice Challa Kodanda Ram ) This appeal .....

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ated 18.10.96 of the Appellate Tribunal which allowed MODVAT credit on felts, wires and dandy cloth used in the manufacture of proper and paper machinery particularly when a claim has been made from 1987 onwards and no appeal has been preferred by the second respondent against the above said order? ii. Whether the first respondent is correct in not appreciating the fact that in the Form EA.3 filed before the Appellate Tribunal, the period of dispute was indicated as 1987 onwards and the Appellat .....

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ndent is correct in denying the credit on procedural grounds when the Honble Supreme Court in the case of M/s. Formica India Division 1995 (77) ELT 511 (SC) has held that the benefit of Notification No.71/71-C.E. cannot be denied on technical ground of non-compliance with Rule 56A procedure?" 2. At the outset, learned Senior Counsel Smt. M.Bhaskara Lakshmi, at the time of hearing, would submit that Question No.iv does not arise from the orders of the Tribunal, and as such, the same need not .....

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llenged by the appellant before the Commissioner (Appeals), Madras, and the same came to be rejected vide Order dated 31.08.1988 in Appeal No.254 of 1988. The appellant further carried the matter before the CEGAT, Madras, and the same also came to be dismissed on 22.11.1991 in Final Order No.643 of 1991. The orders of the CEGAT dated 22.11.1991, rejecting the claim of the appellant for availing MODVAT credit on inputs, became final. It may be mentioned here that in the process of appeal the inpu .....

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ern Bench of the CEGAT and the Eastern Bench of the CEGAT, the matter came to be referred to a Larger Bench of the CEGAT and finally, the Larger Bench of the CEGAT in the case of Union Carbide India Ltd. Vs CCE 1996 (66) ECR 172, decided that the MODVAT credit is allowable on the felts and wires. The appellant taking into consideration of the judgments rendered by the CEGAT in the case of Straw Products Ltd., Vs CCE 1992 (59) ELT 572 (T), holding that the felts and wires would also qualify for g .....

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al, which appeal also came to be rejected and finally the matter came up before the CEGAT, Bangalore. The said Appeal was numbered as Appeal No.F/523/96 and E/472/99/MAS. The said appeal came to be allowed by orders dated 18.10.1996 in Order No.1945 of 1996, following the Larger Bench decision in the case of Union Carbide India Ltd., case (supra). On appeal being allowed, the appellant also filed a Rectification of Mistake Application bearing No.E/ROM/817/97 before the CEGAT to recall and rectif .....

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eking explanation why MODVAT credit taken should not be reversed. After consideration of the explanation, by an order dated 19.05.1998, the MODVAT credit was directed to be reversed, confirming the show cause notice dated 04.09.1997. Further appeals filed by the appellant before the Commissioner (Appeals) and the CEGAT came to be dismissed, confirming the order dated 19.05.1998 of the Assistant Commissioner. In the above fact-situation, the present appeal is filed by the Appellant questioning th .....

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g the MODVAT credit on account of the reversal of the said rejection order by the Tribunal holding that the appellant is entitled to avail MODVAT credit, became final, as there is no challenge to the same. The appellant in its declaration dated 07.07.1992, filed in the form of EA-3, specifically claimed input credit for the period from 29.07.1987 to 09.07.1992. The same was rejected by the Assistant Commissioner on 03.06.1994, which order came to be reversed by the Tribunal by its order dated 18 .....

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, Case (supra) would operate from the year 1987, and as such, the appellant is entitled to avail the MODVAT credit for the period from 29.07.1987 to 09.07.1992. Whatever may be the position prior to 1992 on account of the order of the Tribunal dated 18.06.1996, which order has not been challenged, the input credit, which has been availed by the appellant, cannot be termed as improper, and as such, the Tribunal has erred in dismissing the appeal of the appellant. 5. On the other hand, Sri Swaroop .....

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the declaration dated 07.07.1992 made by the appellant, wherein the appellant itself had stated that it may be allowed to avail MODVAT credit on felts and wires in view of the decision of Straw Products Ltd., case (supra). It is also stated therein that it would file a refund claim against the duty paid from 01.03.1987 till the date of acknowledgments and also duty on stocks held as on 28.02.1987 against the above two inputs separately. The said declaration is filed under Rule 57G of the Rules. .....

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ppellant seeking refund of the MODVAT claim, and the denial of which had become final by virtue of the orders of the Tribunal dated 22.11.1991. In other words, disentitlement of the MODVAT credit for the period from 29.07.1987 to 09.07.1992 became final, thereby the taking of credit by the appellant in February, 1997 became wrongful availment. The same came to be adjudicated upon under Rule 57-I of the Rules, which is the provision dealing with the cases of wrongful availment MODVAT credit. Rule .....

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ths from the last date on which such return is to be filed under the said rule, serve notice on the manufacturer or the assessee who has taken such credit requiring him to show cause why he should not be disallowed such credit and where the credit has already been utilized, why the amount equivalent to such credit should not be recovered from him 8. In the present set of facts, the order of the Tribunal in Union Carbide of India Ltd., case (supra) relied on by the learned counsel for the appella .....

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ng the input credit came to be challenged by the appellants by resorting to the provisions under the Act and Rules and the denial order came to be affirmed by the Tribunal, which denial became final. The order of the Tribunal, intra parties is binding and there cannot be any two opinions about the same decision. Further the effort made by the appellant seeking rectification of the order of the Tribunal on 22.11.1991 also came to be rejected and in fact the reference which is sought from the said .....

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ng to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law. So long as that order stands, the duty cannot be recovered back nor can any claim for its refund be entertained. 9. We are also not impressed with the a .....

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erpretation of Sections 11A and 11B of the Act and further in the context of partly overruling the earlier judgment of the Supreme Court in STO Vs. Kanhaiya Lal Mukundlal Saraf 1959 SCR 1350=AIR 1959 SC 135 case. 11. As a matter of fact, the Larger Bench of Supreme Court had categorically held that any duty paid under mistake of law can be recovered only by resort to the provisions of Section 11B of the Act. In the present case though the petitioner in the letter dated 07.07.1992 had categorical .....

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