9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (6) TMI 135 - AT - Central Excise
Issues involved: Interpretation of duty credit reversal due to sale of units, applicability of Modvat Rules, liability on inputs, work in progress, and finished goods, reliance on precedents for limitation defense, determination of duty recovery, imposition of penalty, bar of limitation defense.
Interpretation of duty credit reversal: The case involved M/s. Telco hiving off units without duty credit balance in RG 23A or RG 23C, leading to revenue initiating proceedings for duty credit reversal due to sale of units. The hived off units started with zero balance in Modvat credit registers, but had inputs in balance, work in progress, and finished goods physically present. No transfer of credits was sought during the hiving off process. Applicability of Modvat Rules: The appellants relied on various precedents to argue against any duty or liability on them in this case. They cited cases like Jamna Auto, Metzeller Automotive Profiles India Pvt. Ltd., and Whirlpool of India Ltd. to support their claim. Liability on inputs, work in progress, and finished goods: The Tribunal found that the proceedings on inputs could not be upheld as the Excavators were removed on payment of duty. The removal of inputs to M/s. Telco for assembly of Motor Vehicles, and subsequently to the hived out unit for job work without reversal of credit, was in accordance with Modvat Rules. Therefore, no duty demands on M/s. Telco were justified. Reliance on precedents for limitation defense: The appellants also relied on cases like Mahindra & Mahindra Ltd., Geep Industrial Syndicate Ltd., and Chemo Pulp Tissues for the plea on limitation. The Tribunal found merit in the arguments regarding the bar of limitation and ordered the liabilities to be set aside. Determination of duty recovery and penalty imposition: Since there was no determination of duty or credit recovery, the penalty imposed was deemed unnecessary and set aside. The Tribunal found no grounds for duty demands on M/s. Telco, as established by the movement and accounting of inputs in accordance with Modvat Rules. Conclusion: The Tribunal allowed the appeal, ordering that no liabilities be upheld based on the arguments presented and the precedents cited.
|
