2008 (7) TMI 423 - HC - Central Excise

Whether in the facts and circumstances of the case the Tribunal is justified in holding that there was no allegation of deliberate act or omission on the part of the respondent for wrongly taking credit and holding it to be case of bona fide mistake subsequently rectified despite evidence on record as regards wilful and wrongful availment of modvat credit taken with guilty mind to misutilize the facility of availment of modvat credit? Whether the Tribunal is justified in holding that there was no mala fide intention of wrongful availment of credit despite evidence that such invalid/wrongful availed modvat credit was utilized for the purpose of payment of central excise duty on excisable goods manufactured and cleared by the respondent ? Held that - If in the light of the aforesaid findings of fact the Tribunal has come to the conclusion that this is basically a case of bona fide mistake which has been subsequently rectified the High Court does not find any error of law which would warrant interference. Primarily the matter has been decided on the basis of the facts and evidence on record.In the circumstances no question of law as proposed or otherwise much less a substantial question of law can be said to arise out of the impugned order of Tribunal. Accordingly both the appeals are dismissed.

Summary

Issues:
Whether Tribunal was justified in holding no deliberate act or omission by the respondent for wrongly taking credit? Whether Tribunal was justified in holding no mala fide intention of wrongful credit availment by the respondent?

Analysis:
The appellant-revenue raised questions regarding the Tribunal's decision on the respondent's alleged wrongful credit availment. The Tribunal found that the respondent had mistakenly taken credit of Basic Customs Duty, which they were not eligible for, but rectified the mistake by paying the duty. The Commissioner (Appeals) noted that the respondent had a substantial balance in their credit accounts and no mala fide intention was proven. The Tribunal concluded that there was no deliberate act or omission by the respondent for the wrongful credit availment, considering it a bona fide mistake that was rectified promptly.

The High Court directed the appellant to provide material proving the respondent's intentional wrongful credit availment, but no such evidence was presented. Despite the absence of the appellant's counsel, the Court proceeded to decide the appeals. The Court noted the Tribunal's findings that the respondent had mistakenly taken the credit and had no mala fide intention. As there was no disputed fact that the respondent had a significant balance during the relevant period, the Court upheld the Tribunal's decision that it was a bona fide mistake rectified by the respondent.

Based on the factual findings and evidence on record, the High Court concluded that the Tribunal's decision was based on the facts of the case. The Court found no error of law that would justify interference in the Tribunal's decision. As no substantial question of law arose from the Tribunal's order, the High Court dismissed both appeals, upholding the Tribunal's decision regarding the respondent's credit availment issue.