TMI Blog2019 (1) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 in Writ Appeal No.1271 of 2000 going in favour of them against the department. And there is also no dispute that the modvat credit taken and utilized for the payment of duty on the final products shall not be allowed as refund - Certain averments were made by the respondents regarding the refund process which is deliberately ignored since the same is not part of relief sought under this Writ Petition. Therefore, consciously no opinion is expressed regarding the proceedings in Show Cause Notice C.No.V/21/18/166/2009 dated 26.05.2010 issued in the refund claim proceedings. Whether the impugned Show Cause Notice No 34/2010 dated 11.10.2010 is sustainable? - Held that:- In the peculiar circumstances of the case, the question of demanding modvat credit availed is not tenable. It is arbitrary exercise of power. It is not correct to argue that the dispute got settled in favour of the petitioner by virtue of an order of this Court and as a consequence a demand notice gets slapped on them. Such a preposition borders on absurdity. The recourse to Section 5-B of the Central Excise Act, 1944 by the respondents is not correct. At the material time, while the petitioner had contested the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court following the decision of Crane Betel Nut Powder Works Vs. Commissioner of Customs Central Excise reported in (2007) 4 SCC 155. 5.Consequent to the dismissal of the Writ Appeal, the petitioner had filed a refund claim of ₹ 29,07,723/- being the excise duty paid by them under protest on 16.11.2009 resubmitted again on 29.03.2010 for the period May, 1994 to March, 1995. While processing the refund claim, the second respondent had issued a Show Cause Notice in C.No.V/21/18/166/2009-Refund dated 26.05.2010 and an addendum dated 28.10.2010 proposing to reject the refund claim on the ground that the original documents relating to the payment of duty were not produced and that the petitioner had already availed a credit of ₹ 14,34,493/- on the inputs used in the manufacture of final products for which refund claim is filed 6.In the intervening time, the impugned show cause notice dated 11.10.2010 came to be issued proposing to demand the modvat credit of ₹ 14,34,493/- on the ground that the final products cleared by the petitioner is not leviable to duty as held by this Court taking recourse to Rule 57 C of the Central Excise Rules, 1944. The non is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rugs Pharma vs Union of India (2004 (166) ELT 153), Titaghur Paper Mills Co.Ltd vs State of Orissa (AIR 1983 SC 603), Whirlpool Corporation vs Registrar of Trade, Mumbai Other (1998 (8) SCC), Harshanslal Sabina another Vs Indian Oil Corporation other (2003 (2) SCC 107) and some decisions of the Hon'ble High Courts in Loharu Steel Industries Limited Vs Collector of Central Excise (1993 (66) ELT 179 (Kar.)), Order dated 27.11.2008 WP (MD) No 3665 of 2006 of this Hon'ble Court. 9.It was alleged that the petitioner had not manufactured any excisable goods during the relevant period and therefore they were not entitled to take modvat credit on any inputs used in the manufacture of non excisable goods and therefore the issue of show cause notice is in accordance with Rule 57-C read with Rule 57-I of the erstwhile Central Excise Rules, 1944. It was also submitted that by virtue of Section 5-B of the Central Excise Act, 1944, when the petitioner had not voluntarily reversed the credit in the contemplated circumstances, the same can be recovered under the provisions of Section 11-A and Section 11-AB of the Central Excise Act, 1944. 10.The respondents submit that the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11.10.2010 is sustainable. Admittedly there was a dispute going on at the material time. The duty was paid by the petitioner under protest. Meaning, the determination of duty and the assessment was forced upon the petitioner and therefore there is no time limit for seeking refund by petitioner in the event of a favourable decision at a later date. And the petitioner got a favourable Order. Obviously, the Department was aware of the modvat credit availed and had no objection about the petitioner availing modvat credit at the material time. In fact, the Department thought the modvat credit is correctly availed and allowed the same from time to time. That is the slated position of the Department atleast until the order in Writ Appeal was passed by this Hon'ble Court. The Department had objection to the availing of modvat credit only after filing the refund claim by the petitioner on 29.12.2009 resubmitted again on 29.03.2010. Therefore, the credit is not wrongfully availed. In other words, the modvat credit was rightfully availed during the material time but became ineligible, as the final products were held to be non excisable at a distant date by this Hon'ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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