2000 (7) TMI 361 - AT - Central Excise

Summary

Issues:
1. Validity of Modvat credit availed by the appellant.
2. Contravention of Rule 57G by the appellant.
3. Imposition of penalty under Rule 173Q of Central Excise Rules.
4. Question of limitation period regarding the show cause notice issued.
5. Allegations of suppression of facts and misrepresentation by the appellant.

Analysis:

1. The appellant appealed against the impugned order, challenging the denial of Modvat credit. The appellant, a manufacturer of Switch Mode Power Supply, availed Modvat facility under Rule 57A of Central Excise Rules. Investigations revealed discrepancies in the receipt of goods under subsidiary gate passes from different sources, leading to the denial of Modvat credit. The Collector issued a show cause notice under Rule 57-I, which was contested by the appellant. The appellant argued that the goods were received under proper duty paying documents and cited precedents to support their claim. The Tribunal found in favor of the appellant, stating that there was no suppression of facts to invoke the extended period, thus allowing the appeal and setting aside the impugned order.

2. The appellant was accused of contravening Rule 57G by receiving goods under subsidiary gate passes from sources different from the main suppliers. The appellant contended that the goods were received correctly and that the practice was common in the industry. The respondent argued that suppression of facts was evident, leading to the denial of Modvat credit. However, the Tribunal found in favor of the appellant, stating that there was no clear case of suppression by the department, and the demand was time-barred. The impugned order was set aside based on this finding.

3. The imposition of a penalty under Rule 173Q of Central Excise Rules was challenged by the appellant. The Tribunal, after considering the arguments and evidence presented, found in favor of the appellant on the grounds of no suppression of facts and the demand being time-barred. Consequently, the penalty was not upheld, and the appeal was allowed with consequential relief.

4. The question of the limitation period regarding the show cause notice issued to the appellant was extensively analyzed by the Tribunal. The appellant's argument that there was no suppression of facts to invoke the extended period was accepted, leading to the setting aside of the impugned order. The Tribunal found that the demand was time-barred, and the appellant's contentions were upheld.

5. Allegations of suppression of facts and misrepresentation by the appellant were thoroughly examined by the Tribunal. The appellant's defense that there was no intent to evade duty and that the omission did not amount to suppression was considered. The Tribunal found inconsistencies in the department's case and ruled in favor of the appellant, stating that the demand was time-barred and the impugned order could not stand. The appellant's contention was upheld, and the appeal was allowed with consequential relief.