1998 (10) TMI 268 - Commissioner - Central Excise

Summary

Issues:
- Denial of Modvat credit on inputs used in HT Coils
- Failure of adjudicating authority to consider submissions and case laws
- Defective non-speaking order

Denial of Modvat credit on inputs used in HT Coils:
The appellant, a manufacturer of electrical transformers, filed an appeal against the denial of Modvat credit on inputs used in HT Coils. The adjudicating authority contended that no credit on inputs used in coils is admissible as coils are not a marketable commodity. The appellant argued that the coils manufactured by them are marketable and used in repairing transformers, different from those in the cited case. They supplied coils to MPEB for transformer repairs and provided specimen invoices to support their contention. The marketability of their coils was established by tenders issued by PSEB. Additionally, the authority disallowed Modvat credit on a document later recognized as proper under Rule 57G, indicating a technical error on the department's part.

Failure of adjudicating authority to consider submissions and case laws:
Upon personal hearing, the appellant reiterated their submissions, emphasizing that the coils manufactured by them were marketable and used in transformer repairs. However, the adjudicating authority based its decision on a previous ruling without considering the appellant's arguments or the case laws cited by them. The Commissioner noted that the authority's failure to consider the submissions and case laws rendered the impugned order defective as it was a non-speaking order. The lack of consideration for the appellant's arguments and legal references led to the decision being remanded for de novo adjudication, emphasizing the importance of following the principles of natural justice.

Defective non-speaking order:
The Commissioner found that the impugned order was defective due to the adjudicating authority's failure to address the appellant's submissions and the case laws presented. The order lacked a proper analysis of the arguments put forth by the appellant, leading to a non-speaking decision. Consequently, the case was remanded to the lower authority for a fresh adjudication, emphasizing the necessity of a speaking order that addresses and evaluates the appellant's contentions and legal references.