1992 (7) TMI 221 - AT - Central Excise

Summary

Issues:
1. Validity of denial of modvat credit for inputs used in final products under Chapter X Procedure.
2. Requirement of a fresh show cause notice by the Addl. Collector.
3. Enforcement of notice within a reasonable time under Rule 57-I.
4. Legality of the order passed by the Addl. Collector, Central Excise, Pune.

Analysis:

Issue 1:
The appellants claimed modvat credit for inputs used in manufacturing final products. The department noticed discrepancies in the utilization of modvat credit for products cleared under Chapter X Procedure. The Asstt. Collector adjudicated on this issue, but the Collector (Appeals) set aside the order due to an extended period notice issued beyond six months. The Addl. Collector later issued a corrigendum alleging suppression of facts and confirmed duty demand based on extended period. The Tribunal found that the Addl. Collector's actions were not supported by the original show cause notice and set aside the order, emphasizing the need for a fresh notice due to time limitations. The appeal was allowed based on this ground.

Issue 2:
The Revenue raised a question on whether a fresh show cause notice was necessary when a corrigendum was issued by the Addl. Collector. The Ld. JDR argued that the corrigendum sufficed as a valid notice for adjudication. However, the Tribunal disagreed, stating that the original notice did not support the Addl. Collector's actions and emphasized the requirement of a fresh notice due to the Collector (Appeals) setting aside the initial order without remand.

Issue 3:
Regarding the enforcement of notice within a reasonable time under Rule 57-I, the Ld. JDR referenced a case from the Gujarat High Court to argue that Section 11A provisions were independent of Rule 57-I. However, the Tribunal did not give a finding on this issue, as it was not deemed necessary for the decision. The question did not survive consideration due to the primary issue of the need for a fresh notice.

Issue 4:
The reference application contended that the order passed by the Addl. Collector, Central Excise, Pune, was legally sound. However, the Tribunal rejected the application, emphasizing that the original notice did not survive for consideration after the order was set aside without remand. The Tribunal concluded that a fresh notice was required in this case, rendering the reference application unnecessary.