Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (4) TMI 449

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... er orders to the effect that an aggregate amount of ₹ 9,31,904/- being the MODVAT credit allowed to the Petitioner for the period prior to 1st March 1998 by the Dy CE by the order dated 30.7.1999 cannot be recovered by the Department. Consequently, the Department cannot, at this stage, seek to enforce any demand viz-a-viz the MODVAT credit availed on HSD by the Petitioner prior to 1.3.1998. Therefore, the Respondent is restrained from seeking to recover from the Petitioner the MODVAT credit on HSD availed by it for the period prior to 1st March, 1998. The impugned demand notices to that effect are set aside. Constitutional validity of Section 112 of the Finance Act 2000 as received the assent of the President - Denial of credit of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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 excisable goods. In the course of manufacture the Petitioner uses as input High Speed Diesel oil (HSD) for the generation of electricity as well as fuel. The Petitioner claimed MODVAT credit for the duty paid on HSD under Rules 57A and 57B read with Rule 57D of the Central Excise Rules, 1944 (CE Rules). 3. By Notification No. 5/94-CE(NT) dated 1st March 1994, issued in exercise of the powers conferred by Rule 57A of the CE Rules, the Central Government specified the final products described in column (3) of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... it 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, Section 112 of the Finance act 2000 was enacted with effect from 1st April 2000 to validate the denial of credit of duty paid on HSD from 16th March 1995 onwards. Clause 108 of the Finance Bill 2000 (corresponding to Section 112 of the Finance Act 2000), explained its rationale as follows: Clause 108 - seeks to deny credit of the duty paid on high speed diesel oil when used in the manufacture of excisable goods with retrospective effect from the 16th day of March, 1995. It was never the legislative .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nial 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 raised on it in terms of the orders of the Dy CE and CCE (A). The Petitioner has in the present petition challenged the aforementioned demands apart from seeking a declaration that Section 112 of the Finance Act, 2000 is ultra vires the Constitution. 10. At this stage it must be noted that in two decisions, Sangam Spinners Ltd. v. Union of India (2011) 11 SCC 408 and Union of India. v. Maharaja Shree Umaid Mills (2014) 13 SCC 783 the Supreme Court applied Section .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d subsequent to 2nd March, 1998, was recoverable from it, the Department recovered the entire demanded sum of ₹ 22,45,973 together with interest of ₹ 3,28,735 by appropriating various refund claims filed by the Petitioner. This was challenged by the Petitioner by filing 19 appeals before the CCE (A). By a common order dated 17th November, 2002, the CCE (A) upheld the recovery of the entire amount. 13. For the second time, the Petitioner went before the CEGAT against the above order of the CCE (A). By an order dated 25th February, 2003, the CEGAT allowed the Petitioner's appeals and held that the only ₹ 13,14,060/- and ₹ 10,000/- as penalty was recoverable from the Petitioner. It was held that an aggregate amou .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... en 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 ₹ 9,31,904/- being the MODVAT credit allowed to the Petitioner for the period prior to 1st March 1998 by the Dy CE by the order dated 30th July, 1999 cannot be recovered by the Department. Consequently, the Department cannot, at this stage, seek to enforce any demand viz-a-viz the MODVAT credit availed on HSD by the Petitioner prior to 1st March, 1998. 17. In the light of the above subsequent development and in view of the st .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates