2001 (2) TMI 419 - AT - Central Excise

Summary

Issues:
1. Challenge to orders confirming duty liability and Modvat credit reversal.
2. Contention for waiver of pre-deposit based on the deletion of Rule 57-I.
3. Interpretation of the Supreme Court decision in Kolhapur Canesugar Works case.
4. Application of a co-ordinate Bench decision in United Leasing & Industrial Ltd. case.
5. Imposition of duty liability and the directed deposit amount.

Analysis:

1. The appellants challenged orders confirming duty liability and Modvat credit reversal. The main contention for waiver of pre-deposit was based on the deletion of Rule 57-I after the show cause notices were served. The appellants argued that the proceedings initiated should abate following the Supreme Court's decision in Kolhapur Canesugar Works case, which stated that proceedings should continue under the old rule if there is a provision for it in the new rule introduced after the deletion of the previous rule.

2. In the Kolhapur Canesugar Works case, the Supreme Court clarified that pending proceedings can continue under the old rule if the new rule introduced after the deletion of the previous rule allows for it. However, in the present case, the Tribunal found that the subsequent deletion of Rule 57-I did not affect the validity of the order passed when the rule was in force. The Tribunal distinguished the facts of the case from the Kolhapur Canesugar Works case.

3. The appellants referred to a decision by a co-ordinate Bench in the United Leasing & Industrial Ltd. case, where an adjudication order was passed after the deletion of Rule 96ZL. The Tribunal noted the difference between that case and the current case, indicating that the decision in United Leasing & Industrial Ltd. case was not applicable to the present situation.

4. The Tribunal imposed a duty liability of nearly Rs. 41 lakhs on the appellants in the challenged orders. They directed the appellant to make a deposit of Rs. 20 lakhs, approximately 50% of the duty liability. The appellants had already deposited Rs. 5 lakhs, which was acknowledged by the Departmental Representative. The Tribunal instructed the appellant to make a further deposit of Rs. 15 lakhs within four weeks.

5. The compliance reporting was adjourned to a later date for the appellant to fulfill the directed deposit amount. The Tribunal's decision upheld the duty liability imposed on the appellants and required them to make the specified deposit to continue with the appeals process.