2005 (2) TMI 261 - AT - Central Excise

Summary

Issues:
1. Implementation of Tribunal's Final Order regarding Modvat credit and penalty.
2. Validity of show cause notice issued by the Department post implementation of Final Order.

Analysis:
1. The case involved a miscellaneous application by a company seeking implementation of the Tribunal's Final Order regarding Modvat credit and penalty. The company had debited the amount of credit and paid the penalty during the appeal process. The Tribunal had set aside the Order-in-Appeal involving Modvat credit and penalty. The company filed a refund claim, which was allowed by the Assistant Commissioner, and the appeal filed by the Revenue was also dismissed by the Supreme Court. The Department issued a show cause notice alleging that the refunds and re-credit were erroneously allowed and were recoverable under the Central Excise Act.

2. The company argued that the Department had no right to issue the show cause notice after the Final Order of the Tribunal had been implemented. The company contended that the Tribunal had the power under Rule 41 of the CESTAT (Procedure) Rules, 1982, to prevent misuse of its process or secure the ends of justice. On the other hand, the Department opposed the prayer, stating that the Final Order had been implemented by granting the refund of penalty and re-credit of Modvat credit. The Department argued that the show cause notice was a separate legal process that could not be challenged through a miscellaneous application.

3. The Tribunal considered the submissions of both sides and found merit in the arguments presented by the Department. The Tribunal noted that the Final Order had been implemented by granting the refund of penalty and re-credit of Modvat credit to the company. The Tribunal emphasized that the subsequent action taken by the Department, treating the implementation as erroneous, needed to be addressed through the appropriate legal process and not through a miscellaneous application. Therefore, the Tribunal rejected the miscellaneous application filed by the company, directing them to plead their case before the Adjudicating Authority in response to the show cause notice issued by the Department.