2016 (4) TMI 449
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....e Petitioner had wrongly availed, during the period prior to 2nd March 1998, of MODVAT credit of the duty paid on High Speed Diesel oil (HSD) used both for generating electricity and as fuel which the Petitioner considered as an eligible input for the manufacture of two-wheeler scooters. The petition also challenges the constitutional validity of Section 112 of the Finance Act 2000, enacted with effect from 1st April 2000, which validated the denial of credit of duty paid on HSD "at any time during the period commencing on and from the 16th day of March 1995" and ending with the day the Finance Act 2000 received the assent of the President. 2. The background facts are that the Petitioner is a manufacturer twowheeler scooters which are exci....
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....s fuel and in the generation of electricity. By a corrigendum dated 10th March, 1997 the word 'goods' in Rule 57 B was substituted by the word 'inputs'. Another Notification No. 5/98-CE9(NT) dated 2nd March, 1998 was issued whereby an explanation was added below Rule 57-B to clarify that the term 'inputs' used therein only referred to such inputs as may be specified in a notification issued under Rule 57-A CE Rules. The net result was that on and from 2nd March, 1998, MODVAT Credit on HSD was disallowed. 5. Since MODVAT credit was nevertheless claimed by a large number of manufacturers in respect of duty paid on HSD used as fuel or for generating electricity, for the period from 16th March 1995 to 1st March 1998, Se....
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....was therefore affirmed. 8. The further appeal filed by the Petitioner before the CEGAT was disposed of by an order dated 27th June 2000. The CEGAT confirmed the orders of the Dy CE and CCE (A) but reduced the penalty to Rs. 10,000. The CEGAT too therefore impliedly affirmed the order of the Dy CE that the MODVAT credit availed prior to 1st March 1998 was permissible. This was despite the CEGAT taking note of Section 112 of the Finance Act, 2000 which validated the denial of MODVAT credit in respect of duty paid on HSD from 16th March 1995 onwards. 9. Even prior to the above order of the CEGAT, letters were issued by the Superintendent of Excise, Kanpur to the Petitioner on 30th May, 2000 and 12th June, 2000 seeking to recover the demand r....
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....ision on the constitutional validity of Section 112 as long as it is clarified that no coercive steps will be taken by the Department to recover the MODVAT credit availed by the Petitioner on HSD prior to 2nd March 1998. 12. Reverting to the facts of the present case, it is pointed out that although in terms of the order dated 27th June 2000 passed by the CEGAT, a sum of Rs. 13,14,060, being the MODVAT credit wrongly availed of by the Petitioner for period subsequent to 2nd March, 1998, was recoverable from it, the Department recovered the entire demanded sum of Rs. 22,45,973 together with interest of Rs. 3,28,735 by appropriating various refund claims filed by the Petitioner. This was challenged by the Petitioner by filing 19 appeals befo....
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....Department sought time to obtain instructions. 16. Today, Mr Kaushik informs the Court that as regards the above order dated 15th September 2003 of the Supreme Court, he has no instructions. The Court, therefore, proceeds on the basis that the said order records the considered stand of the Department in the matter. In other words the statement made by the Department before the Supreme Court that "refund has already been given" to the Petitioner holds good and reflects the position that the Department has accepted the orders of the Dy CE and CCE (A) which were affirmed by the order dated 25th February 2003 of the CEGAT. By the last mentioned order, the CEGAT re-affirmed the earlier orders to the effect that an aggregate amount of Rs. 9,31,9....