2001 (9) TMI 1033 - AT - Customs

Summary

Issues:
1. Appeal against order-in-original regarding Modvat credit reversal.
2. Non-compliance with Board's Circular for verification by Cost Accountant.
3. Request for remand for de novo consideration by original authority.

Analysis:
1. The appeal was filed challenging the order-in-original dated 16-11-2000, where the Commissioner confirmed an amount under Section 28(1) of the CE Act, 1962, for reversing Modvat credit on indigenous inputs. The appellant contended that the Commissioner's decision was premature as the verification by a Cost Accountant, as per the Assistant Commissioner's letter and Board's Circular, had not been completed. The appellant requested a remand for proper verification before finalizing the case.

2. The appellant's counsel highlighted the Board's Circular No. 318/34/97-CX., which mandated verification by a Cost Accountant nominated by the Chief Commissioner under Section 14A of the CE Act, 1944, before issuing certificates for credit reversal. It was argued that since no such verification had taken place, the matter needed to be re-examined by the original authority, providing the appellant with an opportunity to refute the Department's allegations. The Department did not object to the re-examination based on the presented submissions and records.

3. The Tribunal, after considering the submissions and the Board's Circular, found that the Commissioner had not followed the prescribed procedure of verification by a Cost Accountant before confirming the demand. As the appellant had claimed full reversal of Modvat credit on indigenous inputs and had not availed any credit for imported material, the Tribunal concluded that a re-look into the matter was necessary. The Tribunal directed the case to be remanded back to the original authority for de novo consideration, emphasizing compliance with the Circular and obtaining the report of the Cost Accountant nominated by the Chief Commissioner under Section 14A of the CE Act, 1944. The appeal was allowed for remand as per the Tribunal's order.