2006 (4) TMI 158 - HC - Central Excise

Summary

Issues involved:
The respondent availed Cenvat credit under Rule 57AB of the erstwhile Central Excise Rules, 1944 for importing old ships for breaking and utilizing the credit of additional custom duty paid on the ships. Three show-cause notices were issued for wrongly taking credit of additional custom duty paid on bunker, foodstuff, etc. The appeal process involved rejection by the Commissioner (A), Central Excise, Rajkot, dismissal by CESTAT, WZB, Mumbai, and subsequent rectification of mistake application.

Judgment Details:

1. Show-Cause Notices and Appeal Process:
Three show-cause notices were issued under Rule 57AH (now Rule 12 of Cenvat Rules) along with relevant sections of the Central Excise Act, 1944. The Assistant Commissioner confirmed the demand raised in the notices, which was upheld by the Commissioner (A), Central Excise, Rajkot. The appeal to CESTAT, WZB, Mumbai was dismissed, leading to a rectification of mistake application by the assessee.

2. Tribunal's Finding and Appeal:
The Tribunal's finding stated that fuel oil and foodstuff on board ship were not eligible for Modvat credit as inputs for manufacturing scrap from ship breaking. However, there was no specific finding on levying interest on unutilized Cenvat credit. The Tribunal held that interest cannot be charged on unutilized credit ordered to be reversed, as it was not availed by the assessee. The appellant's appeal was dismissed by the Court as no substantial question of law arose from the Tribunal's order.

3. Court Proceedings:
The Court heard the Assistant Solicitor General of India and noted that the appellant's counsel could not identify any flaws in the Tribunal's order. Consequently, the Court found no substantial question of law to consider and dismissed the appeal.

This judgment clarifies the eligibility of credit for specific inputs, the treatment of unutilized credit, and the process of appeal in excise duty matters, emphasizing the importance of specific findings in such cases.