1997 (7) TMI 393 - AT - Central Excise

Summary

Issues:
1. Denial of credit taken by the appellants under Rule 57E read with Rule 57A.
2. Imposition of penalty on the appellants.
3. Interpretation of time-bar under Rule 57E.
4. Reference to decisions of High Courts on similar issues.
5. Verification of Modvat credit taken by the appellants.

Analysis:

1. The appellants had taken credit under Rule 57E read with Rule 57A based on a certificate of payment of duty by the supplier's factory. The adjudicating authority denied the credit and imposed a penalty. The appellant argued that the credit was taken correctly as per a Tribunal judgment in Tata Engineering Locomotive Co. v. Collector of Central Excise. The Tribunal held in favor of the appellants, allowing the credit subject to verification by Central Excise Officers based on the appellants' maintained records.

2. The adjudicating authority imposed a penalty of Rs. 10,000 on the appellants along with demanding the denied credit. The appellant contested this penalty, stating that the credit was rightfully taken under the Central Excise Rules. The Tribunal did not address the penalty separately in its judgment but focused on the credit issue.

3. The time-bar issue arose concerning the demand for duty. The Commissioner held that the appellants failed to maintain proper records of input stock and utilization, leading to a suppression of facts. However, the Tribunal disagreed, stating that the appellants had submitted relevant accounts and records, making the demand for duty time-barred. The Tribunal set aside the demand due to the time limitation.

4. The respondent Commissioner referenced decisions of different High Courts on similar issues, arguing that the Tribunal's decision was not final. However, the Tribunal upheld its decision based on the Tribunal's judgment in Tata Engineering Locomotive Co. case, stating that it was bound to follow that precedent.

5. The Tribunal allowed the Modvat credit taken by the appellants, subject to verification by Central Excise Officers. It emphasized the importance of maintaining accurate records for verification purposes. The Tribunal found no suppression of facts by the appellants and deemed the demand for duty as time-barred, ultimately disposing of the appeal in favor of the appellants.