2010 (7) TMI 865 - AT - Central Excise

Summary

Issues: Disallowance of credit for goods not considered capital goods, imposition of penalty

The Appellate Tribunal CESTAT Kolkata heard an appeal concerning the disallowance of credit amounting to Rs. 18,58,227.51 and the imposition of a penalty of Rs. 1,00,000. The Appellant argued that the goods in question, including voltage stabilizers, Silicon carbide, Grease pump, Hydraulic Jack, and Industrial Fans, are integral parts of the plant. They contended that the demand was not sustainable. On the other hand, the Revenue asserted that the goods were not capital goods and relied on the adjudicating authority's findings. The Tribunal noted that the Show Cause Notice was issued in 1995, the reply was filed in 1995, and the adjudication order was passed in 2006 after a significant delay of more than 10 years. However, the order did not provide a reason for the delay in granting a personal hearing. Despite the Appellants being heard in 2005, the order was issued in 2006, raising concerns about the process. The Tribunal found that the matter required re-consideration due to the lack of specific findings on whether the goods were capital goods. Consequently, the impugned order disallowing the credit and imposing a penalty was set aside, and the case was remanded to the adjudicating authority for a fresh decision after allowing both parties to present evidence. The Appellants were directed to appear before the adjudicating authority for further proceedings. The adjudicating authority was instructed to make a decision within three months after the evidence presentation.

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