2009 (12) TMI 989 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the refusal of adjournment request by the representative of the respondents and the challenge to the order passed by the Commissioner (Appeals) regarding the modvat credit.

Refusal of Adjournment Request:
The Tribunal received a letter from the Chartered Accountant representing the respondents requesting an adjournment due to personal work. However, the Tribunal declined the adjournment request as no cogent reason was provided other than personal work, and the matter dated back to 2005.

Challenge to Commissioner (Appeals) Order:
The appellants contested the order passed by the Commissioner (Appeals) which allowed modvat credit amounting to Rs. 16,66,361. The Assistant Commissioner of Bhopal had initially disallowed this credit and imposed a penalty of Rs. 5 lakh along with interest. The challenge was based on the contention that the Commissioner did not properly interpret Notification No. 5/94-CE (NT) dated 01.03.1994 and granted modvat credit in violation of the said notification.

Interpretation of Impugned Order:
The Commissioner (Appeals) justified the modvat credit based on the decision of the Larger Bench in the case of Vikram Ispat vs. CCE, Mumbai-III. The impugned order clarified the process for determining the quantum of modvat credit for goods procured from 100% EOU, emphasizing the need to ascertain the additional duty of customs leviable on like goods imported into India and the duty paid by the EOU. The order concluded that the modvat credit was admissible to the appellant based on the provisions of Notification No. 5/95-CE.

Larger Bench Decision in Vikram Ispat Case:
The Larger Bench in the Vikram Ispat case highlighted that the duty paid by 100% EOU on goods cleared to DTA is excise duty, not customs duty. The decision emphasized that the method of recovering tax does not alter its character, and the duty paid by EOU should not be dissected into different components of customs duty. The decision also noted that the Revenue's attempt to restrict Modvat credit was unfounded, and the duty paid by EOU should be considered excise duty.

Conclusion:
The Tribunal dismissed the appeal as the impugned order was based on the decision in the Vikram Ispat case, which was not challenged by the department and hence binding. The appeal was deemed to have no grounds for interference, and therefore, it was dismissed.