1997 (3) TMI 335 - AT - Central Excise

Summary

Issues:
1. Challenge to Order denying Modvat credit by Assistant Commissioner
2. Appeal before Commissioner (Appeals) and setting aside of Order on limitation grounds
3. Re-credit of Modvat amount by respondent during pendency of appeal
4. Fresh proceedings initiated by Department against respondent
5. Confirmation of Modvat credit and penalty imposed by Assistant Commissioner
6. Appeal against Assistant Commissioner's order before Commissioner (Appeals)
7. Reasoning of Assistant Commissioner in denying re-credit of Modvat amount
8. Decision of Commissioner (Appeals) in setting aside Assistant Commissioner's order
9. Appeal before Appellate Tribunal CEGAT, CALCUTTA

Analysis:

1. The case involves a challenge by the Commissioner of Central Excise, Bhubaneswar against an Order denying Modvat credit by the Assistant Commissioner. The denial was based on the Despatch Challans of M/s. Hindustan Copper Ltd., Cuttack.

2. The respondent, M/s. Konark Wires (Pvt.) Ltd., appealed before the Commissioner (Appeals) who set aside the Assistant Commissioner's order on limitation grounds. The Commissioner (Appeals) allowed the appeal, stating that the order was barred by time under Rule 57-I of the Central Excise Rules, 1944.

3. During the appeal process, the respondent deposited the Modvat credit amount. Upon the setting aside of the Assistant Commissioner's order, the respondent re-credited the amount. Subsequently, the Department initiated fresh proceedings against the respondent.

4. The Department alleged that the Modvat credit was taken by the respondent without proper authority and documentation. The Assistant Commissioner confirmed the Modvat credit and imposed a penalty, stating that the re-credit was unauthorized as the Order-in-Appeal did not authorize it.

5. The respondent appealed against the Assistant Commissioner's order, and the Commissioner (Appeals) set aside the order, allowing the appeal.

6. The Appellate Tribunal heard arguments from both parties. The Member found the Assistant Commissioner's reasoning flawed, emphasizing that when an order is set aside, the party is entitled to the benefits, regardless of the reason for setting aside the order. The Member criticized the denial of benefits by the Assistant Commissioner and rejected the Department's appeal.

7. The decision of the Commissioner (Appeals) in setting aside the Assistant Commissioner's order was upheld by the Appellate Tribunal, rejecting the Department's appeal. The Member emphasized the entitlement of parties to benefits when an order is set aside, irrespective of the reason for setting it aside.