TMI Blog2016 (9) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the Modvat, there is an intention to neutralize the tax suffered on the inputs cleared as such for export. Thus, with respect to goods exported by the appellant, it can be stated that the intention of the Government was to allow the credit of such inputs. Moreover the export sealing of these goods was done by Revenue and therefore they cannot say that they were not aware of it. Thus, suppression cannot be alleged in these circumstances. Therefore, the extended period cannot be invoked in these circumstances. - Decided in favour of appellant - Appeal No. E/3126/05 - Order No. A/89505/16/EB - Dated:- 26-8-2016 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri Prasad Paranjape, Advocate for Appellant Shri S.V. Nair, Asstt. Commissioner (AR) for Respondent ORDER Per: Raju The Tribunal in the case of the appellant, in its earlier order, has decided the issue on merits observing as follows: - 1. The notice issued to the appellant alleged wrong taking of modvat credit by it on three counts - on parts of glass tube forming machinery which were exported along with this machinery without reversing the credit on the ground that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of that machine. We are therefore satisfied that it is not all input and the credit has rightly been denied. 4. The third item relates to spares for the machine. It is stated that its contract with its intended buyers required the appellant to supply certain number of spares of the machine along with the machine. The appellant acquired and kept in stock some spares which were to be supplied for the machine that was to be exported. It is accepted that the export did not take place, the export order having been aborted in the year 1991-92 when it was due for export. It is also accepted that the spares in question could not be utilised in the manufacture of any goods subsequently because the company has stopped manufacturing operations for the last ten years. In that situation, it is clear that the credit that was taken of the duty paid on these parts was required to be reversed. The reversal that was made therefore was in order. 5. A penalty of ₹ 15 lakhs has been imposed for having taken credit wrongly of ₹ 20 lakhs approx. Except with regard to the compressor and possibly on the shrink wrapping machinery with regard, to which the appellant could have believ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as force along with the plea of a bonafide belief on the part of the appellant that the credit was available to them therefore they made the declarations. The submission on how the base of 6 months limitations was not applicable in the facts as matter requires a dc novo decision by the adjudicators since he has only relied upon the admissions made, which are being retracted. The matter is therefore required to be remitted to the Commissioner to re-hear the issue on the question of time bar and thereafter quantify the demands and penalty if any. The matter was thereafter taken up by the Commissioner, who has held as follows: - (i) The extended period is correctly invoked. (ii) The demand already quantified confirmed under Order-in-Original No. 229/96-Commr. Dated 30.9.1996 is reconfirmed except Modvat Credit availed on Air Compressor which was allowed to the assessee by Hon ble CEGAT vide their order No. CII/2953/WZB/2002 dated 4.10.2002. (iii) No order on penalty as the amount of penalty of ₹ 15 lakhs imposed on M/s Shavik Glasstech Ltd. has been reduced to ₹ 10 lakhs by Hon ble CEGAT/CESTAT vide their order referred above. Aggrieved by the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order of the Tribunal dated 4.10.2002 clearly records that the claim of the appellant that they took the stand that they did in the reply to the notice, as a result of coercion of the departmental authorities is patently absurd. The said order also records that it is impossible to believe that the appellant s reply, was drafted by an advocate and dictated by any officer of the department. 5.2 We find that the defence of the appellant is largely based on the fact that there was no revenue loss as the goods were exported and the fact that even if the credit was taken on spares, it was possible to export the same and avail refund of the duty paid in terms of Rule 57F of the Modvat Credit Rules. The appellant have also relied on the Board s Circular No. 283/117/96-CX dated 31.12.1996. Para 3 to 5 of the said Circular reads as follows: - 3. Rule 57A(1) provides for the general scheme of MODVAT given in Section V(AA) of the Central Excise Rules, 1944 and it indeed mentions that credit of duty will be allowed for utilising towards payment of duty of excise leviable on the final products. WHereas Rule 57F is a more specific provision regarding manner of utilisation of the inp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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