2017 (5) TMI 229 - AT - Central Excise

Rectification of mistake - reversal of modvat credit - job-work - goods cleared for job-work not received back within 60 days - Held that - we find that Commissioner has already confirmed the amount which was admittedly reversed therefore there is no relief as regard this particular amount. We therefore maintain the demand of ₹ 1,39,418/- reversed by the respondent. Interest on MODVAT reversed - Revenue claims that interest was not confirmed by the adjudicating authority in the order-in-Original which was chargeable in terms of Rule 57 I(5) of erstwhile Central Excise Rules, 1944 therefore order may be corrected - assessee claims that the said rule is applicable in case of wrong availment of credit by reason of fraud, mis-statement, suppression of facts etc. In the present case no such ingredient is available therefore the interest which is chargeable in terms of Rule 57 I(5) is not applicable in the present case - Held that - there is no proposal in the SCN for demand of interest. In absence of such proposal in the SCN ground cannot be made by way of Revenue s appeal - Respondent admittedly reversed the Cenvat credit. This is not the case of wrong availment of credit by reason of fraud, misstatement, suppression of facts etc. Therefore interest provision of Rule 57 I(5) is not applicable, hence, no interest is payable on the amount of modvat reversed. ROM application disposed off - decided partly in favor of Revenue.

Summary

Issues: Rectification of Mistake application regarding reversal of modvat credit and interest chargeability under Rule 57 I(5) of Central Excise Rules, 1944

In this judgment by the Appellate Tribunal CESTAT Mumbai, the Rectification of Mistake application was filed by the Revenue concerning the reversal of modvat credit. The Revenue contended that the Commissioner had confirmed the reversal of a specific amount but had not reflected this confirmation in the operative part of the order. The Revenue also argued that interest chargeability under Rule 57 I(5) was not confirmed in the original order. On the other hand, the respondent's counsel argued that the reversal of the modvat amount had already been confirmed by the Commissioner, and no further confirmation was necessary. Additionally, it was argued that interest under Rule 57 I(5) was not applicable in this case as it pertained to cases involving fraud, misstatement, or suppression of facts, which were not present here. After considering both sides' submissions, the Tribunal found that the Commissioner had indeed confirmed the reversed amount, and therefore, no further relief was granted in this regard. The Tribunal also ruled that interest under Rule 57 I(5) was not applicable as the reversal of modvat credit did not involve any fraudulent activity. Consequently, the Tribunal disposed of the Revenue's Rectification of Mistake application accordingly.