2016 (9) TMI 78 - AT - Central Excise

Modvat credit - rejected without properly examining - Held that - the Tribunal while remanding the case for denovo adjudication had observed that issue with reference to Modvat Credit has not been examined properly and had directed the quantification of duty amount payable by appellant. In the denovo adjudication we find that lower authority has glossed over the submission of the appellant that the seized invoices/documents required by them for putting forward a defence have not been supplied by DGCEI. The adjudicating authority has then given the cryptic order without quantifying the duty amount payable as directed by the Tribunal. The lower authority has merely ended with rejection of Modvat Credit without any order for duty to be recovered and fine and penalties to be imposed. Therefore, as the lower authority has merely ended with rejection of Modvat Credit without any order for duty to be recovered and fine and penalties to be imposed, the impugned order is set aside and the matter is remanded to the adjudicating authority for denovo consideration. - Appeal allowed by way of remand

Summary

Issues:
1. Proper examination of Modvat Credit claim during denovo adjudication.
2. Quantification of duty payable as directed by the Tribunal.
3. Completeness and legal infirmity of the denovo Order-in-Original.

Analysis:
1. The case involved a show cause notice dated 02-12-1999 alleging clandestine manufacture clearance and undervaluation, proposing duty demand, interest, penalties, and confiscation. The Commissioner confirmed the proposals initially. On appeal, the Tribunal remanded the matter for denovo adjudication due to improper examination of Modvat Credit claim.

2. In the denovo proceedings, the adjudicating authority rejected the Modvat Credit claim without quantifying the duty payable as directed by the Tribunal in the order dated 30-01-2004. The department raised concerns that the order lacked clarity and did not comply with the Tribunal's directions, leading to an appeal against the denovo order.

3. The department argued that the denovo order was incomplete and suffered from serious legal infirmity as it only addressed the rejection of Modvat Credit without determining duty recovery, fines, and penalties. The Tribunal agreed with the department's submissions, noting that the lower authority failed to follow the Tribunal's directions and did not address all proposals of the show cause notice.

4. Consequently, the Tribunal set aside the impugned order and remanded the matter for denovo consideration, emphasizing the need for proper examination of the Modvat Credit claim, quantification of duty payable, and addressing all aspects of the show cause notice as per the Tribunal's directions in the previous order.