2012 (9) TMI 938 - HC - Central Excise

Refund claim - Whether the Modvat credit availed by the parties on replaced old CPT s with new one should not be recovered along with interest? - penalties - Held that - until it is found that repaired and defective colour picture tubes received from the company were not replaced and that new colour pictures were cleared from the same factory without payment of duty, refund could not be refused - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Recovery of Modvat credit on replaced old CPTs with new ones.
2. Imposition of penalties for irregular modvat credit on replacement of old CPTs with new ones.

Analysis:
1. The judgment pertains to a Central Excise Appeal under Section 35G of the Central Excise Act, 1944, addressing the recovery of Modvat credit on replaced old CPTs with new ones. The Customs, Excise & Service Tax Appellate Tribunal decided multiple appeals involving common questions of law. The appeals filed by respondent-companies were allowed, and those filed by the revenue were dismissed in a common order dated 28-8-2006. The Central Excise department subsequently filed an appeal against this order, which was summarily dismissed by the High Court on 8-12-2009 for lack of any question of law.

2. The Court considered the questions of law raised by the department and analyzed the Tribunal's previous order. The Tribunal had found that there was no evidence to prove the replacement of defective CPTs with new ones without payment of duty. It was noted that no demand of duty had been raised against the company alleged to have cleared new CPTs as defective repaired ones. The Tribunal's earlier order emphasized that until it was established that defective items were replaced with new ones without duty payment, refund could not be refused.

3. The judgment highlighted the Tribunal's adherence to its previous final order, which emphasized the need for concrete evidence to support allegations of irregularities in replacing goods without duty payment. The Court ultimately found no substantial question of law in the appeal and dismissed the Central Excise Appeal summarily. The decision was based on the lack of legal issues warranting further consideration, as determined by the Court's previous dismissal of a similar appeal on the same grounds.

In conclusion, the judgment provides a detailed analysis of the legal issues surrounding the recovery of Modvat credit and the imposition of penalties for irregular credit availing. It underscores the importance of concrete evidence to support allegations of duty evasion and emphasizes the need for legal merit in appeals to warrant further consideration by the Court.