2006 (11) TMI 451 - AT - Central Excise

Summary

Issues:
1. Challenge to levy of Central Excise duty on Cable Jointing Kits.
2. Refund claims and Modvat/Cenvat credit availed on inputs.
3. Departmental show cause notice alleging contravention of Rule 57C.
4. Penalty imposition for alleged wrong utilization of credit.

Analysis:

1. The appeal was filed against the levy of Central Excise duty on Cable Jointing Kits despite the appellants' contention that the goods were not excisable. The High Court held that no manufacture was involved in the kits, leading to refund claims. The Tribunal directed the restoration of duty paid and credit availed, emphasizing that no duty was leviable ab initio. The appellants restored the credit as per the Tribunal's order.

2. The Department issued a show cause notice alleging contravention of Rule 57C regarding Modvat credit utilization. The appellants argued that they followed Departmental instructions and had not violated any provisions, as upheld by the Tribunal. The appellants contended that the notice was time-barred and that they had not committed any offense in taking the credit, which was still unutilized.

3. The show cause notice proposed recovery and penalty for alleged improper credit utilization. The appellants argued that they acted as per authorities' directions and should not be penalized. They maintained that the credit was taken in compliance with legal orders and that no violation of Central Excise Act or Rules occurred. The Tribunal found no merit in the Department's contentions and set aside the impugned order, allowing the appeal.

4. The Tribunal concluded that the appellants had not engaged in any activities warranting penalty imposition. The Tribunal emphasized that the appellants followed legal directions and orders at every stage, including the High Court and Tribunal decisions. The show cause notice was deemed time-barred, and the Tribunal found no violation of Central Excise duty, ultimately allowing the appeal and setting aside the impugned order.