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2005 (5) TMI 399 - AT - Central Excise
Issues:
1. Waiver of pre-deposit of duty and penalty. 2. Reversal of credit in respect of inputs lying in stock due to change in duty rate. 3. Interpretation of provisions under Rule 57C(1) of the Central Excise Rules. Analysis: The case involved the applicants seeking a waiver of pre-deposit of duty and penalty amounting to Rs. 7,36,345/- each. The applicants, engaged in the manufacture of Electrical Equipment, transitioned from the Modvat Scheme to availing benefits under Notification No. 16/97-C.E., dated 1-4-97, clearing goods at a Nil rate of duty. The Revenue contended that credit of duty in respect of inputs lying in stock should be reversed due to the change in the duty rate. The applicants argued that their credit balance was fully utilized for duty payment on 1-4-97, citing a Tribunal decision and a Supreme Court dismissal in their favor. The Revenue relied on a Tribunal decision in another case, Jyoti Cement Spun Pipe Works & Anr. v. CCE, Belgaum, which the Tribunal found not applicable to the present case. The Tribunal noted that the Revenue's reliance on a different rule was not helpful, as the present case involved Rule 57C(1) of the Central Excise Rules. The Tribunal, referring to a Larger Bench decision, held that the credit availed and utilized during a dutiable period need not be reversed if the final product is subsequently exempted from duty. In light of this, the Tribunal found the applicants had a strong case, waiving the pre-deposit of duty and penalty for the appeal hearing, allowing the stay petition. In conclusion, the Tribunal granted the waiver of pre-deposit of duty and penalty for the applicants, emphasizing the interpretation of Rule 57C(1) of the Central Excise Rules and the applicability of the Larger Bench decision in similar cases. The judgment highlighted the importance of considering specific provisions and precedents when determining the reversal of credit in cases of duty rate changes, ensuring a fair and just outcome for the parties involved.
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