1999 (10) TMI 697 - AT - Central Excise

Summary

Issues:
1. Appeal against the order of the Collector (Appeals) setting aside the order of the Assistant Collector.
2. Application of Circular of the Board No. 3/92 by the Collector.
3. Jurisdiction of the Assistant Collector in adjudicating the matter.
4. Scope of the Board's circular in relation to demands under Section 11A and Rule 57-I.
5. Distinction between Modvat credit and duty payable on manufactured goods.
6. Applicability of the Board's circular only to demands of duty under Section 11A and not Modvat credit.
7. Decision to set aside the impugned order and remand the case to the Commissioner (Appeals).

Analysis:
The appeal before the Appellate Tribunal CEGAT, Mumbai was lodged by the department challenging the decision of the Collector (Appeals) to set aside the Assistant Collector's order. The department argued that the Collector erred in applying the Circular of the Board No. 3/92, contending that the Assistant Collector exceeded the prescribed limits for adjudication. The department emphasized that the question of jurisdiction was not raised before the Assistant Collector and should not have been addressed by the Collector (Appeals).

The departmental representative reiterated these contentions, with the Tribunal acknowledging that the Collector (Appeals) had the right to consider and allow the appeal on the issue of jurisdiction, which is a legal matter. The Tribunal referenced a previous decision where it was held that the circular of the Board in question was binding, despite an alternative view expressed in another case. The Tribunal clarified that the matter before the Assistant Collector pertained to the recovery of Modvat credit, not a demand under Section 11A, suggesting that the circular restricted the Assistant Collector's powers only concerning demands under Section 11A, not Rule 57-I.

The Tribunal rejected the argument that the circular should apply to demands for Modvat credit under Rule 57-I, emphasizing the distinct treatment of Modvat credit and duty payable on manufactured goods in the legislation. It concluded that the circular exclusively pertained to demands of duty under Section 11A and not Modvat credit, rendering the Collector (Appeals)'s order unsustainable. Consequently, the Tribunal allowed the appeal, overturning the impugned order and directing the Commissioner (Appeals) to adjudicate the case on its merits according to the law.