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TMI Blog2016 (12) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... ri C J Mathew, Member (Technical) Shri M.H. Patel with Shri Nitin Mehta, Advocates for the appellant Shri R.K. Maji, Asstt. Commissioner (AR) for the respondent Per: C J Mathew: These two appeals have been filed in a dispute relating to valuation of grindings sold by appellant-assessee to suppliers, availment of ineligible MODVAT credit on additional duty discharged at the time of import and missing stock at the factory premises. This matter has now travelled to this Tribunal for the second time; on the former occasion, the adjudication by Commissioner of Central Excise, Aurangabad dated 1 st December 1999, having been found to require re-determination of demand in the light of decision of Larger Bench of the Tribunal in Wyeth Laboratories Ltd v. Commissioner of Central Excise, Bombay [2000 (120) ELT 218 (Tribunal-LB)] , the Tribunal, in order no. A/955-958/C-III/WZB/04 dated 11 th August 2004, remanded all the issues for being heard afresh. The jurisdictional adjudicating authority, since vested in Commissioner of Central Excise Customs, Nasik, complied with the direction of the Tribunal by issue of order-in-original no. 15/CEX/2005 dated 25 th May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virgin material, viz., ₹ 54 per kg, which, at the insistence of M/s Tainwala Chemicals and Plastics (India) Ltd, was reduced to ₹ 20 per kg to reflect the actual value of such material. The case of Revenue is that this reduction was deliberately devised to evade duty on the differential value which was adjusted through the medium of the debit notes. The alleged short-recovery was paid by debit of ₹ 21,08,490 in the MODVAT Credit account before issue of show cause notice. 5. We observe that, on the former occasion, the Tribunal, having accepted the validity of these debit notes, had directed the original authority to take these into consideration while re-adjudicating the matter. On a perusal of the impugned order we find that this direction had been complied with in its breach by the original authority. We find no option other than to step into effect the rectification ourselves. 6. Before doing so, we may need to elaborate on the nature and purpose of credit/debit notes in commercial transactions. Issuance of such notes has been in vogue in commercial practice for very long for computation of net amount for settlement between two commercial entities which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmination of the facts and thereafter applying these facts for loading of the value and levy of duty, if any, as per law. There is no doubting of the specificity and tenor of the direction given to the original authority. The explanation rendered by the appellant-assessee before the original authority vide letter dated 28 th March 2005 appears to have been peremptorily dealt with by placing reliance on the tentative conclusions in the show cause notice instead. This cannot but be characterized as anything other than disregard of the directions of the Tribunal. The impugned order concludes In the absence of any substantial and accurate statistical information and the documents, I find that the debit notes issued by the assessee on account of rate difference does not establishing (sic) the contention of the party. I therefore confirm the duty demand of ₹ 21,08,490/- made on the debit note Despite the findings in the first order having been criticized for being cryptic, the second order, by adopting incomprehension as justification for rejecting the debit notes and explanation furnished by the appellant-assessee, has also failed to redeem itself. Moreover, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in DEPB scheme towards CVD. The Revenue s contention is that mere debits in DEPB pass book is not sufficient but there should have been cash payment reflected in the said pass book. The Revenue is oblivious of the fact that the total result of the debit in DEPB pass book is as good as cash payment. The appellant does not get the benefit to the extent to which there is a debit under DEPB scheme towards CVD. The Revenue is in fact receiving the CVD duty on debit made in the DEPB scheme pass book. Therefore, the Bill of Entry endorsement reflecting the payment towards CVD and Bill of Entry being a specified document under Rule 57G, appellants are entitled to avail Modvat credit. The purpose of giving Modvat credit is to avoid cascading effect hence so long as CVD has been paid either in the form of cash or though debit entries, the assessee is entitled for the benefit of Modvat credit. The Revenue s stand is too technical and I do not see any substance in the Revenue s stand. Even the Commissioner (Appeals) has recorded in Para 7 that there is room for difference of opinion and on that account he has set aside the penalty. In my opinion availment of Modvat credit is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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