2005 (4) TMI 79 - HC - Central Excise

Summary

Issues Involved: Application under Sec. 35H of the Central Excise Act, 1944 for reference of questions of law to the High Court arising from an appellate order passed by the Tribunal regarding utilization of credit earned on inputs, limitation on demand, and penalty imposition.

Analysis:

1. Utilization of Credit Earned on Inputs:
The issue at hand pertains to whether the Assessee is entitled to utilize credit earned on inputs used in the manufacture of Mopeds on payment of Central Excise Duty on scooters in which such inputs were not used. The Tribunal had decided this issue in favor of the Assessee, prompting the Revenue to seek a reference to the High Court. The Court found that this question is one of law and deserves examination. The Tribunal is directed to refer this question to the High Court for a detailed answer based on the facts of the case.

2. Limitation on Demand:
Another crucial issue raised in the judgment is whether the demand in question, amounting to Rs. 2,57,64,971.40 paisa, is barred by limitation. The Tribunal's decision on this matter was also challenged by the Revenue, leading to the High Court's intervention. The Court deemed this question as one of law, necessitating a thorough examination. The Tribunal is instructed to refer this question to the High Court along with all relevant facts and annexures for a comprehensive analysis within three months.

3. Penalty Imposition:
The final issue discussed in the judgment revolves around whether there is a case for imposing a penalty on the Assessee. The Tribunal had ruled in favor of the Assessee on this aspect as well, prompting the Revenue to seek clarification from the High Court. The Court determined that this question is also a question of law and should be examined in detail. The Tribunal is directed to refer this question to the High Court for a comprehensive evaluation along with all necessary details to facilitate a thorough response.

In conclusion, the High Court of Judicature of Madhya Pradesh, in response to an application under Sec. 35H of the Central Excise Act, 1944, has directed the Tribunal to refer questions of law regarding the utilization of credit earned on inputs, limitation on demand, and penalty imposition to the Court for detailed examination. The Court found these questions to be questions of law and instructed the Tribunal to provide a statement of the case with all relevant facts and annexures for a comprehensive analysis within three months.