2006 (11) TMI 422 - AT - Central Excise

Confiscation of plant and machinery - Cenvat/Modvat - Interest cannot be levied by corrigendum

Summary

Issues:
1. Levy of interest.
2. Confiscation of Plant and Machinery against the redemption fine of Rs.1 lac.

Analysis:

Levy of Interest:
The appellant had wrongly availed credit and depreciation, leading to the imposition of interest. The appellant filed a revised income tax return for the year 1995-96, reversing the depreciation amount and submitting a Chartered Accountant certificate. The consultant argued that the adjudicating authority cannot review its order without express provisions in the Central Excise Act 1944. Referring to circular No. 506 and legal precedents, the consultant contended that issuing a corrigendum post-order is impermissible. Citing cases like Kilitch Co. (Pharma) Ltd. and Commissioner of Central Excise, Kolkata v. Bharat Lub Industries (P) Ltd., it was established that departure from the adjudication order through a corrigendum is legally untenable.

Confiscation of Plant and Machinery:
The consultant highlighted Rule 173Q sub Rule 2, emphasizing that the case fell under sub-clause (bb) of sub-Rule-1 for taking credit. Arguing that sub-clause (bb) was absent in sub-rule 2, the consultant asserted that the confiscation of Plant and Machinery was unlawful. The consultant contended that since the case did not align with the provisions of sub-rule 2, the confiscation ordered by the Adjudicating Authority was deemed illegal. Consequently, the Tribunal found that interest could not be imposed via corrigendum, and the confiscation of Plant and Machinery was not legally permissible. Hence, the Tribunal set aside the levy of interest and the confiscation of Plant and Machinery based on the legal analysis provided.

This comprehensive analysis of the judgment from the Appellate Tribunal CESTAT, Mumbai, delves into the intricate legal arguments surrounding the issues of interest levy and confiscation of assets, providing a detailed overview of the case's legal intricacies and the Tribunal's decision.