2010 (5) TMI 245 - HC - Central Excise

Demand- Limitation- Revenue carried the matter in appeal the Tribunal on the ground of suppression of facts. The Tribunal vide the impugned order held in favour of the revenue on merits, but dismissed the appeal on the ground of limitation. Adjudicating order not containing findings as to why submission against allegation of suppression of fact not acceptable. Held that-finding in the order that Tribunal Larger Bench order and High Court ruiling in favour of assessee during relevant period and ambiguity over applicability of relevant rules. Tribunal order sustainable. Question of law not arise and appeal dismissed.

Summary

Issues:
Challenge to order interpreting Central Excise Rules, 1944; Rejection of appeal on limitation grounds; Allegations of suppression or malafide; Ignoring facts of supplying steam attracting Modvat/Cenvat Credit.

Analysis:

1. The appeal before the Gujarat High Court challenged an order by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) regarding the interpretation and application of erstwhile Rules 57B(1)(IV) of Central Excise Rules, 1944. The primary issue was whether the Tribunal erred in allowing the credit of duty paid on input (Furnace Oil) used in the manufacture of Steam sold for subsequent use outside the factory of production.

2. The respondent sold steam to a company during a specific period, and the demand for recovery of Modvat credit on consumption of furnace oil used in the manufacture of steam was confirmed by the adjudicating authority. The Commissioner (Appeals) later allowed the appeal based on earlier Tribunal orders involving similar issues.

3. The Revenue appealed to the Tribunal, which ruled in favor of the Revenue on merits but dismissed the appeal on the grounds of limitation. The appellant vehemently contested the Tribunal's order, arguing that suppression of facts regarding the manufacture and sale of steam had been established.

4. The High Court analyzed the arguments raised by the appellant and respondent. It noted that the respondent had provided relevant details and exemptions during the relevant period. The Tribunal found that there was no suppression or malafide on the part of the respondent, especially considering the decisions of the Larger Bench of the Tribunal and the High Court in favor of the respondent.

5. The High Court concluded that there was no legal infirmity in the Tribunal's decision regarding the absence of suppression or malafide, thus dismissing the appeal. It was determined that no substantial question of law arose from the impugned order of the Tribunal, leading to the rejection of the appeal.

In summary, the High Court upheld the Tribunal's decision, emphasizing the absence of suppression or malafide on the part of the respondent and dismissing the appeal based on the lack of substantial legal questions arising from the case.