2009 (10) TMI 760 - AT - Central Excise

Summary

Issues:
Appeal against order of Commissioner (Appeals) regarding denial of credit and imposition of penalty u/s Rule 57-I.

Summary:
The Department appealed against the Commissioner (Appeals) order where the respondents availed deemed credit for steel inputs under Notification No. 58/97. The original authority denied credit, imposed a penalty, and the department sought penalty imposition u/s Rule 57-I. The Commissioner (Appeals) allowed the party's appeal, setting aside duty demand and penalty. The Department appealed against this order.

The Department argued that invoices lacked declaration of duty payment, supported by the Range Officer's report. They sought restoration of duty demand, penalty, and imposition of Rule 57-I penalty. The Advocate for the respondents contended that the invoices' declaration of goods cleared under Rule 96ZP(3) proved duty payment by the supplier. The Tribunal's decision in CCE v. Mahajan Steel Tubes was cited, confirming duty discharge by the supplying unit.

The Tribunal noted that the supplying unit operated under a compounded levy scheme, with invoices declaring compliance with Rule 96ZP(3). The duty liability under the scheme is predetermined, and the Superintendent cannot question duty payment. Lack of evidence on duty non-payment by the supplying unit rendered the original authority's credit denial unwarranted. The Commissioner (Appeals) rightly accepted the declaration as proof of duty discharge. The Tribunal upheld the decision in Mahajan Steel Tubes, stating that credit cannot be denied based on the manufacturer's duty payment. Any dispute on duty payment should be addressed against the manufacturer.

Therefore, the Department's appeal was rejected as no merit was found in challenging the Commissioner (Appeals) order.