2004 (3) TMI 637 - AT - Central Excise

Summary

Issues:
1. Improper credit of CVD based on documents.
2. Allegation of contravention of Central Excise Rules.
3. Duty demand and penalty imposition.
4. Interpretation of Rule 57E(3) regarding disqualification for credit.
5. Validity of duty payment certificate endorsed by appraiser.

Analysis:
1. The case involved an appeal by the Revenue against the order-in-appeal alleging improper credit of CVD by the respondents based on documents not in accordance with Central Excise Rules. The show cause notice claimed that the CVD credit was availed on the basis of a certificate not complying with Rule 57E of the Central Excise Rules, 1944, and that the CVD paid for excess import under DEEC scheme could not be utilized as Modvat credit as per Rule 57E(3).

2. The Assistant Commissioner upheld the show cause notice, confirming duty demand and imposing a penalty of Rs. 20,000 on the appellants. However, the Commissioner (Appeals) set aside the order, leading to the Revenue's appeal to the Tribunal.

3. During the hearing, the first ground discussed was the payment of CVD on excess imports. The Commissioner (Appeals) noted that the disqualification under Rule 57E(3) for credit would not apply in this case as the importer voluntarily approached the DGFT to foreclose the license due to inability to meet export obligations, not due to evasion or default.

4. Regarding the interpretation of Rule 57E(3), it was clarified that disqualification for credit arises only in cases of suppression of facts, misstatement, or evasion. Since the importer's actions were not aimed at evading duty, the disqualification did not apply, as determined by the Commissioner (Appeals).

5. The validity of the duty payment certificate endorsed by the appraiser was also discussed. The Tribunal found that in cases where duty is required to be paid on previously duty-free cleared goods, the certificate endorsed by the appraiser serves as a primary document of duty payment, even if not explicitly listed in Rule 57G. The acceptance of such certificates was deemed valid, especially when supported by cash challans and appraiser certification.

6. Ultimately, the Tribunal concluded that the Revenue's appeal lacked merit based on the analysis presented, and thus rejected the appeal.