2007 (5) TMI 490 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit for evaporation boats.
2. Challenge to attachment proceedings and auction notice.
3. Maintainability of appeal and application for stay.
4. Levying of interest under Section 11AA of the Central Excise Act.
5. Applicability of CEGAT Procedure Rules, 1982.

Analysis:

1. Admissibility of Modvat credit for evaporation boats:
The appellant, engaged in manufacturing metallised aluminum paper, availed Modvat credit for evaporation boats. The department alleged the credit was inadmissible, leading to a demand for duty payment. The appellant paid the duty but disputed the interest claim under Section 11AA of the Central Excise Act, citing tribunal judgments supporting their stance. The department, however, persisted in demanding interest, culminating in the attachment of goods for auction to realize the interest amount.

2. Challenge to attachment proceedings and auction notice:
The appellant challenged the attachment proceedings and auction notice before the Commissioner (Appeals), which were dismissed on the grounds of non-maintainability. Subsequently, the appellant approached the Tribunal to challenge the impugned order passed by the Commissioner (Appeals) regarding the auction notice, seeking a stay on the operation of the order pending appeal.

3. Maintainability of appeal and application for stay:
The Departmental Representative argued that the appeal was not maintainable as per the Commissioner (Appeals)' decision, emphasizing the absence of an appellable order. Additionally, it was contended that there was no provision for staying the lower authority's order without a pre-deposit. In response, the appellant's counsel asserted the Tribunal's jurisdiction to review the impugned order and challenged the correctness of the decision, supported by the CEGAT Procedure Rules, 1982.

4. Levying of interest under Section 11AA of the Central Excise Act:
The dispute revolved around the department's insistence on levying interest under Section 11AA for delayed duty payment, despite the appellant's argument that the duty payment predated the introduction of the interest clause. The Tribunal acknowledged a prima facie case in favor of the appellant, staying the impugned order and the auction of seized goods pending appeal, emphasizing the urgency of the matter and setting an early hearing date.

5. Applicability of CEGAT Procedure Rules, 1982:
The appellant's counsel invoked Rule 41 of the CEGAT Procedure Rules, 1982, to support their argument regarding challenging the impugned order before the Tribunal and seeking a stay on its operation. The Tribunal considered the submissions from both sides and granted a stay on the impugned order and the auction of seized goods, highlighting the need for an early hearing to address the urgent issue.