2003 (11) TMI 518 - AT - Central Excise

Summary

Issues:
1. Application for recalling a Stay Order directing deposit of Rs. 80 lakhs.
2. Validity of denial of Modvat credit on duty paid on high-speed diesel oil.
3. Interpretation of provisions of the Sick Industrial Companies (Special Provisions) Act and Central Excise Act.

Analysis:
1. The case involved a Misc. application by a company seeking to recall a Stay Order requiring the deposit of Rs. 80 lakhs. The company argued that they were not in production during the initial hearing period due to a funds crisis, causing them to miss the hearing. They also highlighted their status as a sick company registered with BIFR. The company had filed an SLP against a decision of the Rajasthan High Court in the Supreme Court, although no stay had been granted by the Supreme Court.

2. The issue of denial of Modvat credit on duty paid for high-speed diesel oil from May 1998 to March 2000 was raised. The denial of Modvat credit was based on the validity of Section 112 of the Finance Act, 2000, which had been upheld by the Rajasthan High Court. The Respondent argued that as no stay had been granted by the Supreme Court, the company was required to pre-deposit the entire amount of Modvat credit wrongly availed. Reference was made to a Supreme Court decision in Metal Box India Ltd. v. CCE, Bombay, highlighting the relief provided under Section 22 of the Sick Industrial Companies (Special Provisions) Act.

3. The Tribunal considered the submissions and found that the company had not proven that the notice for the hearing was not received by them. The acknowledgment received by the Registry from postal authorities indicated that the notice was duly received. The Tribunal noted that the company's pre-occupation with other affairs did not excuse their absence from the hearing. Additionally, since the issue had been decided against the company by the Rajasthan High Court and no stay had been granted by the Supreme Court, the Tribunal rejected the application to recall the Stay Order. The decision was based on the interpretation of relevant legal provisions and the lack of grounds to reconsider the initial order.