2006 (5) TMI 484 - AT - Central Excise

Summary

Issues involved:
1. Whether appellants can take "Suo moto" credit against reversal made by them without a show cause notice?
2. Validity of the Commissioner's order allowing the appeal.
3. Legality of the impugned order and the Revenue's appeal.

Analysis:
1. The primary issue in this case revolves around whether the appellants were entitled to take "Suo moto" credit against a reversal made by them without a show cause notice. The Commissioner noted that the credits originally taken by the appellants, which were reversed, were not eligible to be denied without a proper show cause notice issued by the Department. The Commissioner highlighted that the re-credits taken by the appellants were based on their letters and that the Department had not issued any show cause notice to deny the credits initially taken. Referring to a similar case, the Commissioner held that the suo moto credit taken after intimation to the Assistant Commissioner cannot be denied, following the Tribunal's decision in a specific case. Consequently, the Commissioner set aside the impugned order, allowing the appeal of the appellants with consequential relief.

2. The second issue pertains to the validity of the Commissioner's order that allowed the appeal filed before him. The order emphasized that no legally valid order had been passed for the denial of the Modvat credit taken by the appellants. The Commissioner's decision was based on the lack of a show cause notice from the Department to recover the credits initially taken. The order also mentioned that the Commissioner had followed a previous order of the Tribunal in a similar case, indicating that the decision was in line with established legal principles. Therefore, the Commissioner's order was deemed legally sound, and there was no illegality in the impugned order.

3. Lastly, the legality of the impugned order and the appeal filed by the Revenue were considered. The order stated that there was no merit in the Revenue's appeal, which was consequently rejected. The decision was based on the Commissioner's adherence to legal procedures and precedents set by the Tribunal. The order was dictated and pronounced in open court on a specified date, finalizing the resolution of the issues raised in the case.

In conclusion, the judgment by the Appellate Tribunal CESTAT NEW DELHI upheld the appellants' right to take "Suo moto" credit against a reversal without a show cause notice, affirmed the validity of the Commissioner's order allowing the appeal, and rejected the Revenue's appeal based on the legal soundness of the decisions made.