2006 (12) TMI 372 - AT - Central Excise

Summary

Issues:
1. Admissibility of input credit under Amnesty Scheme.
2. Time-barred refund application.
3. Applicability of principle of res judicata.

Analysis:
1. The appellant, a PSU unit, obtained Quantity Based Advance Licences (QABAL) for duty-free import of materials under a specific scheme. They availed credit of duty paid on inputs used in manufacturing products for export. The Department deemed the input credit inadmissible and required recovery. An Amnesty Scheme allowed for the reversal of availed credit based on a specified formula. The appellant voluntarily calculated and reversed Modvat credit as per the scheme. Subsequently, a refund claim was filed, but it was rejected as time-barred. The Tribunal initially allowed the plea, but the Revenue sought to recover the amount.

2. The appellant argued that the Tribunal's prior adjudication and reversal of credit precluded the Revenue from reopening the matter. They contended that the principle of res judicata should apply in this case. Conversely, the JDR representing the Revenue maintained that the refund application was time-barred and that the impugned order was based on merits, making the appellants ineligible for a refund. The JDR argued that since the Tribunal did not consider the eligibility for a refund on merits, the principle of res judicata should not apply.

3. Upon careful consideration, the Tribunal found that the principle of res judicata applied in this case. The matter had been conclusively adjudicated by the Tribunal in a previous Final Order. As per the Tribunal's ruling, the assessee had rightfully taken the credit, rendering any attempt to reopen the issue and confirm the demand unsustainable. Therefore, the Tribunal granted a waiver of pre-deposit and stayed the recovery pending the appeal's final disposal, scheduled for a specific date. The decision was pronounced and dictated in an open court session.