2004 (10) TMI 150 - AT - Central Excise

Summary

Issues:
1. Whether the appellant was required to debit back the Modvat credit on inputs cleared subsequently at a lower value.
2. Whether the demand raised against the appellant was barred by limitation.

Analysis:
1. The dispute in the appeal centered around whether the appellant had to debit back the Modvat credit when inputs were cleared at a lower value. The duty was confirmed against the appellant for clearing inputs at a reduced value due to various reasons like obsolescence. The appellant acknowledged the obligation to repay the Modvat credit but contended that the demand was time-barred. The consultant for the appellant argued that there was no suppression or fraud, and all transactions were duly reported to the authorities. The appellant's position was supported by references to relevant legal decisions.

2. On the issue of limitation, the Revenue invoked a longer period for raising the demand, citing settled law from earlier Tribunal decisions. The Revenue argued that the appellant, being a leading manufacturer, should have been aware of the legal requirements to reverse the credit. However, the appellant maintained that the demand was beyond the normal limitation period and should be considered time-barred. The Commissioner had rejected the limitation plea, emphasizing the responsibility of the assessee in self-assessment. The Tribunal noted that the case was argued solely on the limitation point, with no arguments presented on the merits.

3. The Tribunal considered the arguments from both sides and found that the demand was indeed barred by limitation. It was observed that the Revenue should have been aware of the legal position established by earlier Tribunal decisions. The Tribunal highlighted that all relevant documents were submitted to the authorities, and the Revenue should have raised objections within the normal limitation period instead of waiting for an extended duration to demand payment. Consequently, the Tribunal set aside the demand and the penalty imposed, granting relief to the appellant based on the limitation issue.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellant on the grounds of the demand being time-barred and setting aside the penalty.