2004 (2) TMI 611 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmed due to Captive Consumption Exemption notification unavailability.
2. Assailed order based on revenue neutrality and limitation grounds.
3. Availability of Modvat credit and absence of documentary evidence.
4. Consideration of duty payment, mala fide intention, and extended limitation period.

Issue 1:
The appellant faced a duty demand confirmation as the Captive Consumption Exemption notification was unavailable during a specific period. The show cause notice issued on 23-4-99 was confirmed by the Commissioner, alleging duty liability for manufacturing parts for captive consumption.

Issue 2:
The appellant challenged the order on two grounds. Firstly, claiming revenue neutrality as they could avail Modvat credit for duty paid on inputs used in manufacturing parts, which could offset duty payment on the final product. Citing precedents like India Foils Ltd. and Jay Yuhshin Ltd., the appellant argued against the duty demand. Secondly, the appellant contended that the demand was time-barred, beyond the normal six-month period, as their jurisdictional Central Excise Authorities were aware of the captive consumption since 1986.

Issue 3:
The Revenue contended that Modvat credit was not available to the appellant due to the lack of documentary evidence proving duty payment on inputs for manufacturing parts. Additionally, it was argued that no classification list was filed, as noted by the Commissioner in the impugned order, affecting the limitation aspect.

Issue 4:
Upon evaluating both parties' submissions, the Tribunal found that the duty confirmed on parts consumed captively was available to the appellant as Modvat credit. Consequently, the Tribunal concluded that there was no mala fide intention to evade duty payment, negating the application of the extended limitation period. Therefore, the Tribunal considered the appellant to have a strong prima facie case and granted a stay, scheduling the appeal for final disposal on 15th March 2004.

This comprehensive analysis of the judgment provides a detailed understanding of the issues involved, the arguments presented by both parties, and the Tribunal's reasoning leading to the decision to grant a stay and fix a date for final disposal of the appeal.