2008 (12) TMI 595 - AT - Central Excise

Cenvat/Modvat - Quantum - valuation - freight - includibility - Held that - duty paid by M/s. D.C.M. Engineering Ltd. having gone into the treasury, through M/s. Guwahati Carbon Ltd., the Respondent D.C.M. Engineering Ltd. should not be debarred to take credit of the same in the absence of any questionable conduct. Finding no material against both the respondents, Revenue fails in both these appeals.

Summary

The appellant, M/s. DCM Engineering Ltd., was accused by the Revenue of availing a higher amount of Modvat credit due to the addition of freight to the cost of goods from M/s. Guwahati Carbon Limited. The adjudicating authority directed M/s. DCM to repay the excess credit and imposed a penalty. M/s. Guwahati Carbon Ltd. was also penalized. Both appellants appealed to the Commissioner (Appeals), who ruled in their favor, relieving them of the charges and penalties. The Revenue appealed against this decision to the Appellate Tribunal CESTAT, New Delhi. The Tribunal found no evidence of intentional wrongdoing by either party and dismissed the Revenue's appeals, allowing both appellants to retain the Modvat credit. The cross objection in appeal No. 3728 was also disposed of. The ld. Counsel for M/s. DCM Engineering Ltd. argued that the duty paid by M/s. Guwahati Carbon Ltd. was genuine and that there was no unjust or illegal claim made by M/s. DCM. The Revenue's charges were focused solely on the inclusion of freight in the basic price, which increased the excise liability. With no evidence of questionable conduct, the Respondent DCM Engineering Ltd. was permitted to take credit for the duty paid. The Tribunal found no material against either respondent and dismissed the Revenue's appeals.