2008 (1) TMI 726 - AT - Central Excise

Summary

Issues involved: Appeal against order of Commissioner (Appeals) regarding Cenvat credit and imposition of penalty under Cenvat Credit Rules, 2002 and Central Excise Rules, 2002.

Summary:

1. The appeal was filed by the Revenue against an order of the Commissioner (Appeals) concerning M/s. White House Cotton Industries Ltd. debiting an amount in their Cenvat account towards duty on capital goods. The Show Cause Notice raised issues u/s Rule 12 of Cenvat Credit Rules, 2002 and Section 11A of the Central Excise Act, 1944. The Assistant Commissioner dropped the proposal to recover the credit but imposed a penalty on WHCL under Rule 27 of Central Excise Rules, 2002.

2. The Commissioner (Appeals) dismissed the Revenue's appeal, citing that the grounds of appeal exceeded the scope of the show cause notice. He also mentioned the doctrine of merger as the reason for dismissal, as an earlier appeal by the respondents had set aside the original authority's order.

3. Revenue argued that not specifying precise provisions in the show cause notice did not violate natural justice. They contended that the respondents were liable to pay duty as per Rule 57-S(1)(ii) during the material period. The doctrine of merger was also challenged by Revenue.

4. The respondents' counsel reiterated that the original authority's order had merged with the appeal filed by the assessee. They argued that the duty payable on the capital goods had already been reversed by the assessee, and hence, the appeal by Revenue should be dismissed.

5. After reviewing the case records and submissions, it was found that the appeal by Revenue was not maintainable as it raised new grounds not proposed in the show cause notice. The appeal sought to demand duty on different grounds than those in the notice. Therefore, the Commissioner's decision to dismiss the appeal was upheld, and the Revenue's appeal was dismissed.

*(Operative part of the order pronounced in the open Court on 17-1-2008)*