2002 (1) TMI 462 - AT - Central Excise

Summary

Issues:
- Admissibility of Modvat credit on inputs
- Exemption from excise duty
- Remand order by Commissioner (Appeals)
- Maintainability of the appeal

Admissibility of Modvat credit on inputs:
The case involved a Government of India Undertaking engaged in manufacturing electrical/electronics machinery and parts. They were served a show cause notice for recovery of a specific amount on the grounds of availing Modvat credit on batteries that were claimed but not used in manufacturing activity. The appellants contested the notice, claiming the batteries were indeed used in their manufacturing activity. The Assistant Commissioner (A.C.) did not agree with their defense, confirmed the duty, and imposed a penalty. However, the Commissioner (Appeals) set aside the A.C.'s order and remanded the matter for a fresh decision.

Exemption from excise duty:
The appellants argued that the batteries in question were used in manufacturing captive power generation and distribution systems, which were fully exempt from excise duty under a specific notification. They contended that the Modvat credit on inputs used in manufacturing these exempt systems was admissible. The Commissioner (Appeals) considered the exemption notification and previous orders, leading to the remand order for a fresh decision.

Remand order by Commissioner (Appeals):
The learned Counsel for the appellants contended that all their pleas were not considered before the Commissioner (Appeals) issued the remand order. However, the Tribunal found this argument to be misconceived. The Tribunal clarified that the appellants were not debarred from raising their defenses during the fresh decision process. The Commissioner (Appeals) had directed the adjudicating authority to decide the case afresh after hearing the appellants, allowing them to present all their arguments and evidence.

Maintainability of the appeal:
The Tribunal upheld the impugned order of the Commissioner (Appeals) and dismissed the appeal of the appellants as not maintainable. The Tribunal reasoned that since the duty liability and penalty confirmed by the A.C. were set aside by the Commissioner (Appeals), the appellants had no cause of action to appeal further. Therefore, the appeal was deemed not maintainable based on the findings of the Commissioner (Appeals) and the subsequent actions taken.

In conclusion, the judgment addressed various issues related to the admissibility of Modvat credit, exemption from excise duty, the remand order by the Commissioner (Appeals), and the maintainability of the appeal, providing a detailed analysis of each aspect of the case.