2000 (8) TMI 224 - AT - Central Excise

Summary

Issues involved: Appeal against the order of the Commissioner of Central Excise confirming a demand and imposing penalties for disallowing Modvat credit under Rule 57-I of the Central Excise Rules.

Summary:
The appellants, engaged in manufacturing steel products, faced a demand and penalties for allegedly availing Modvat credit without actual receipt of goods. They requested cross-examination of witnesses, filed a reply, and challenged the notice on grounds of limitation. The appellants argued that the raw materials were received, citing production figures and industry norms for burning loss. They also highlighted that Income Tax proceedings had found their transactions genuine. The Tribunal allowed the additional grounds of appeal, noting the importance of the Income Tax proceedings and the plea of limitation. The demand was based on statements of suppliers, but the appellants were denied the opportunity to cross-examine them, violating natural justice. The Commissioner's finding that no reply was filed was incorrect, as the appellants had indeed responded. Therefore, the impugned order was deemed unlawful, set aside, and the case remanded for fresh decision, with directions to allow cross-examination and consider the appellants' submissions.

The appeals were allowed by remand, granting the appellants the opportunity for cross-examination and a fair hearing before a fresh decision by the Jurisdictional Commissioner.