2005 (11) TMI 407 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Appeal No. 56/PAT/CEX/APPEAL/2003.
2. Duty demand of Rs. 78,663 and penalty imposed.
3. Central Excise credit on non-alloy Steel Ingots.
4. Interpretation of Notification No. 29/2000/C.E./Non-tariff.
5. Circular No. 522/2000/TRU and its relevance.
6. Availability of benefit under Notification No. 29/2000-C.E. (N.T.).
7. Verification of conditions applicable to Notification No. 29/2000.

Detailed Analysis:
1. The appeal was made against Order-in-Appeal No. 56/PAT/CEX/APPEAL/2003, dated 17-3-2003 passed by the Commissioner (Appeals), Customs and Central Excise, Patna. The duty involved in the case was Rs. 78,663, with an equal amount of penalty demanded from the appellant.

2. The case revolved around the appellant's Central Excise credit on non-alloy Steel Ingots, which were in violation of specific rules. A show cause notice was issued, leading to a demand of Rs. 78,663.63 under Rule 57AH of the Central Excise Rules, along with an equal penalty. The appellant claimed credit under relevant rules and notifications.

3. The appellant argued based on Notification No. 29/2000/C.E./Non-tariff, dated 31-3-2000, which allowed deemed duty payment on inputs. The appellant contended that the Commissioner (Appeals) wrongly held that the benefit of the notification was not available due to lack of evidence of payment directly to the manufacturer of the inputs.

4. The consultant referred to Circular No. 522/2000/TRU, dated 31-3-2000, emphasizing that the circular did not restrict duty payment. The appellant argued that the deemed credit should be calculated based on the invoice price, as declared by the manufacturer, and that they correctly availed the deemed credit.

5. The judgment highlighted a previous case, J.M.G. Steel (P) Ltd., where the Tribunal held that the appellant was entitled to Cenvat credit based on the invoice price. The Tribunal emphasized the importance of the invoice in determining the deemed credit, supporting the appellant's position.

6. The Commissioner (Appeals) had ruled that the benefit under Notification No. 29/2000-C.E. (N.T.) was not available to the appellant due to the timing of input receipt. However, the judgment disagreed, stating that the appellant should be entitled to the credit as per the relevant notification and circular.

7. Ultimately, the judgment remanded the matter to verify if the conditions of the notification regarding payment were met. The lower authority was instructed to issue a speaking order after verifying the compliance with the principles of natural justice, allowing the appeal by way of remand.