2015 (9) TMI 772 - HC - Central Excise

Disallowance of MODVAT Credit - Whether Tribunal was justified in rejecting the alternative plea of the appellants that their claim ought to have been considered in terms of Rule 173H of the Central Excise Rules 1944, merely because the same was not taken earlier - Held that - Findings recorded in the order in original and the order of the Commissioner (Appeals ) that the process being carried out by the appellants on the defective goods for rectification was not the same which were adopted by them in their manufacturing of final products, has been accepted by the appellants before the Tribunal. The appellants accepted the final order of the Tribunal dated 30.1.2001, whereby the case was remanded to the Adjudicating authority for limited purpose - The remand was made by the Tribunal vide its final order dated 30.1.2001 for limited purpose and that order has attained finality. It was not open for the appellants to raise altogether a new plea before the Tribunal in the second round of litigation and that too contrary to their own stand taken before the Adjudicating Authority. Thus, the Tribunal has not committed any error of law in rejecting the alternate plea of the appellants. The impugned order of the Tribunal suffers from no infirmity. - Decided against assessee.

Summary

Issues:
1. Consideration of claim under Rule 173H of the Central Excise Rules 1944 in the case of Modvat credit disallowance.

Analysis:
The case involved a dispute regarding the admissibility of Modvat credit on defective goods returned by the appellants. The appellants claimed that the goods were reprocessed in their factory and thus eligible for credit under Rule 173H of the Central Excise Rules 1944. The Assistant Commissioner disallowed the credit, leading to a series of appeals and remands. The Tribunal remanded the matter to ascertain if the reprocessing qualified for credit. The appellants accepted the remand order but later sought consideration under Rule 173H in the second round of litigation. The Tribunal rejected this plea, emphasizing that the appellants did not raise this claim earlier and failed to provide detailed reasons for consideration under Rule 173H. The Tribunal upheld the disallowance of Modvat credit, stating that the processes for rectification differed from those used in manufacturing final products. The Tribunal's decision was based on the appellants' acceptance of the remand order and their initial stance that Rule 173H was not applicable, precluding them from introducing a new plea in the second round of litigation. The Tribunal's order was deemed lawful, and the appeal was dismissed, ruling in favor of the respondent-department.

This judgment highlights the importance of consistency in legal arguments and the significance of raising all relevant claims at the appropriate stages of litigation. It underscores the principle that parties cannot introduce new pleas in subsequent rounds of litigation contrary to their earlier positions. The decision reaffirms the Tribunal's authority to uphold previous orders and reject belated claims that were not pursued diligently during the initial proceedings.