2002 (6) TMI 269 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case include the irregular availing of Modvat credit on "Liquid Oxygen" by the assessee for manufacturing goods on job work basis without payment of duty, the issuance of show cause notices for recovery of the irregular credit, the withdrawal of the initial show cause notice, the subsequent issuance of a fresh show cause notice covering a larger period, the confirmation of demand and imposition of penalty by the Additional Commissioner, and the appeal by the assessee against the Order-in-Original.

Details of the Judgment:

1. Availing of Modvat Credit:
- The assessee availed Modvat credit on "Liquid Oxygen" for manufacturing goods on job work basis without payment of duty.
- Rule 57C of Central Excise Rules, 1944 prohibits credit if the final product is exempt from duty.
- Rule 57A allows utilization of inputs in the manufacture of final products.

2. Show Cause Notices and Recovery:
- Show cause notices were issued for recovery of irregular Modvat credit availed by the assessee.
- Initial notice withdrawn by Assistant Commissioner, followed by a fresh notice from Deputy Commissioner.
- Additional Commissioner disallowed credit, confirmed demand, and imposed a penalty under Rule 173Q.

3. Appeal and Order-in-Original:
- Assessee appealed before Commissioner of Central Excise (Appeals) who set aside the Order-in-Original.
- Commissioner held that the subsequent show cause notice was unsustainable due to lack of suppression or misdeclaration.
- CEGAT's judgment in a similar case was cited in support.

4. Revenue's Appeal:
- Revenue filed an appeal against the Commissioner's decision.
- Grounds included errors in allowing the appeal on technical grounds and misapplication of precedents.
- Arguments related to suppression, misdeclaration, and limitation under Rule 57-I(2) were raised.

5. Tribunal's Findings:
- Tribunal noted the issuance and withdrawal of the initial show cause notice.
- No new material was presented in the subsequent notice, which aimed to overcome the limitation.
- Withdrawal of the notice was considered a quasi-judicial decision, not challenged in appeal.
- Principles of res judicata and estoppel were discussed based on previous tribunal decisions.

6. Decision and Dismissal:
- Tribunal dismissed the Revenue's appeal, finding no merit in the arguments presented.
- Cross-objection by the assessee was disposed of accordingly.
- Precedents and legal principles were cited to support the Tribunal's decision.