2006 (3) TMI 613 - AT - Central Excise

Summary

Issues: Jurisdiction of Deputy Commissioner in passing Order-in-original, denial of Modvat credit, denial of credit on polythene film, interim stay on impugned order

Jurisdiction of Deputy Commissioner in passing Order-in-original:
The appellant contended that the Deputy Commissioner, who passed the Order-in-original, lacked pecuniary jurisdiction as the Modvat credit involved exceeded Rs. 20 lakhs. Referring to Circular No. 3/92-CX. 6, it was argued that Deputy Collectors were empowered to decide cases up to Rs. 10 lakhs. However, Rule 57-I of the Central Excise Rules authorized the proper officer to issue show cause notices and determine disallowed credit amounts. Circular No. 299/15/97-CX mentioned the Jurisdictional Central Excise Officer for adjudication under Rule 57-I. It was highlighted that Assistant Commissioners could decide cases involving duty amounts up to Rs. 5 lakhs, while all valuation and classification cases were to be adjudicated by Assistant Commissioners without limit, including modvat disputes not involving fraud. The absence of fraud in the present case indicated that the Assistant Commissioner could decide the modvat dispute without limit, dismissing the contention against the Deputy Commissioner's jurisdiction.

Denial of Modvat credit:
On the merits, the appellant produced a gate pass for Modvat credit of Rs. 3,97,908/-, which was denied. It was argued that the gate pass sufficed to prove receipt of goods in the factory, and as per Section 57G(2), no credit could be taken at that time. Reference was made to Notification No. 7/99-C.E.(N.T.) and Circular No. 441/7/99-CX for guidelines on pending cases. The Commissioner's denial of Modvat credit based on GP-Is documents lacking the appellant's name or endorsement was deemed incorrect, as per the Circular's guidelines.

Denial of credit on polythene film:
Regarding the denial of credit on polythene film, duty amounting to Rs. 20,970/-, the specific use of the film was not stated by the appellant, as noted by the Commissioner.

Interim stay on impugned order:
Considering the circumstances, an interim stay of the impugned order was granted upon the appellant depositing Rs. 1,50,000/- within six weeks, failing which the appeal would stand dismissed. Upon depositing the amount, the pre-deposit of the remaining sum under the order would be waived, with a compliance report scheduled for a later date.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, New Delhi, covers the issues of jurisdiction, denial of Modvat credit, denial of credit on polythene film, and the interim stay on the impugned order, providing a comprehensive understanding of the legal reasoning and decisions involved.