2006 (9) TMI 464 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit of duty and penalty.
2. Availment of Modvat credit on fuel.

Issue 1: Application for waiver of pre-deposit of duty and penalty:
The Tribunal found that it was possible to dispose of the appeal at the current stage with the consent of both parties after granting the prayer for stay. The appeal involved a waiver application concerning duty of Rs. 12,24,151/- and penalty of Rs. 1 lakh for the period October 1994 to May 1995. The Commissioner (Appeals) had directed pre-deposit of 50% of the duty demanded and 50% of the penalty imposed. The assessees sought modification of this order based on a Tribunal decision in another case. However, the Commissioner (Appeals) rejected the modification application, stating that the Tribunal's decision cited was not applicable to the Rule under which the duty was confirmed. The Tribunal noted a strong prima facie case for waiver due to conflicting views by the Commissioner (Appeals) in the same proceedings and remanded the case for a fresh decision without insisting on any pre-deposit.

Issue 2: Availment of Modvat credit on fuel:
The core issue revolved around the availment of Modvat credit on fuel used in the manufacture of steam, which was exempt from duty payment. The Joint Commissioner confirmed duty demand due to the use of fuel in manufacturing steam exempt from duty. The assessees appealed this decision, along with the waiver application. The Commissioner (Appeals) rejected the modification application citing differences in rules and applicability of a Tribunal decision. The Tribunal observed that no findings on the merits of eligibility for credit were recorded by the lower appellate authority. Given the contradictory views of the Commissioner (Appeals) in the same proceedings, the Tribunal set aside the impugned order and remanded the case for a fresh decision after providing a reasonable opportunity for the appellants to be heard.

In conclusion, the Tribunal allowed the appeal by remand, emphasizing the need for a fresh decision on the issues of waiver of pre-deposit and the availment of Modvat credit on fuel. The case highlighted the importance of consistency and proper application of legal provisions in excise duty matters.