1997 (10) TMI 367 - AT - Central Excise

Modvat/Cenvat - Input - Appeal to Appellate Tribunal - Demand - Limitation - Provisional assessment

Summary

Issues:
1. Modvat credit denial for 'Jack Assembly'.
2. Time limitation for show cause notices.
3. Provisional assessment validity.

Analysis:

Issue 1: Modvat credit denial for 'Jack Assembly'
The appellant contended that 'Jack Assembly' was essential for the marketability of motor vehicles and thus eligible for Modvat credit under Rule 57A. The Collector (Appeals) had set aside the order-in-original for re-examination. The appellant cited established trade practices and legal principles to support their claim. The Tribunal, relying on previous decisions, held that 'Jack Assemblies' were indeed eligible for Modvat credit, affirming the appellant's position.

Issue 2: Time limitation for show cause notices
The appellant argued that the show cause notice dated 25-4-88 was time-barred as it exceeded the six-month period for raising demands. The Assistant Collector had rejected the plea of limitation, stating that Rule 57-I did not impose a time limit for reversing Modvat credit. The Tribunal disagreed, citing legal provisions and precedents. It held that the show cause notice was indeed time-barred, emphasizing the application of Section 11A in the absence of a specific time limit under Rule 57-I.

Issue 3: Provisional assessment validity
The dispute involved whether the assessment of 'Jack Assembly' was provisional, impacting the time limitation for the show cause notice. The appellant argued that the assessment lacked the necessary elements for provisional assessment under Rule 9B. The Tribunal concurred, stating that the remarks in the RT-12 returns did not constitute a valid provisional assessment. It rejected the Department's claim of provisional assessment, ruling that the show cause notice was time-barred. The Tribunal distinguished a previous decision cited by the Department, emphasizing the sufficiency of material for timely demands under Rule 57-I.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential benefits to the appellants in accordance with the law.