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2010 (2) TMI 1028 - AT - Central Excise
Issues involved: Determination of service of notice u/s 37C(1)(b) of the Central Excise Act, 1944; Admissibility of Modvat credit under Notification No. 8/99-C.E.; Bar of limitation for service of show cause notice.
The judgment pertains to an appeal against the order of the Commissioner (Appeals), Kanpur, where the respondents were aggrieved by the confirmation of a demand against them by the Deputy Commissioner, Kanpur. The respondents, engaged in the manufacture of Ballot Boxes, had claimed full exemption under Notification No. 8/99-C.E. but had also availed Modvat credit without exceeding the prescribed limit of one hundred lakh rupees for clearance of final products. The show cause notice issued to them was affixed to the factory gate due to the closure of premises, and despite a request for a copy, the respondents did not file a reply or appear before the adjudicating authority. The Commissioner (Appeals) allowed the appeal on the grounds that the service of the show cause notice was beyond the relevant period and that the respondents were entitled to avail the credit under Notification No. 8/99-C.E. The learned DR argued that the exemption under the said Notification was subject to the condition that the manufacturer does not avail of the credit of duty unless the clearance exceeds one hundred lakh rupees. As the respondents did not exceed this limit, they were not entitled to the credit, and the Commissioner (Appeals) erred in finding fault with the adjudicating authority's order. Regarding the bar of limitation, the adjudicating authority had served the notice in accordance with the law, and the additional copy furnished later was at the respondents' request. The affixation of the notice to the factory gate was deemed proper service, and the Commissioner (Appeals) was criticized for deeming it beyond the period of limitation. The appeal succeeded, the impugned order was set aside, and the order of the adjudicating authority was restored, allowing the appeal with consequential relief.
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