Cost Accountant verification governs reversal-based credit claims; absence of the mandated report justifies remand for fresh adjudication.

A binding Board circular required verification by a nominated Cost Accountant before accepting reversal-based credit claims, and an adjudication made without that report was incomplete. On the stated facts, the demand and penalty confirmed under the Customs Act could not be finally sustained on the existing record because the assessee's claim of full Modvat credit reversal needed fresh examination after the mandated verification. The matter was therefore remanded to the original authority for de novo consideration in accordance with the circular and the statutory verification process.

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Issues: Whether the demand and penalty could be sustained without verification by a Cost Accountant nominated under the Board circular and Section 14A of the Central Excise Act, 1944, and whether the matter required remand for de novo consideration.

Analysis: The appeal concerned a demand confirmed under the proviso to Section 28(1) of the Customs Act, 1962, along with penalty under Section 112 of the Customs Act, 1962. The record showed that the Board circular required verification of the exporter's records by a Cost Accountant nominated by the Chief Commissioner where credit was reversed on actual basis. Since no such verification report had been obtained or considered before confirming the demand, the original adjudication was treated as incomplete. The assessee's contention that Modvat credit had been fully reversed also required fresh examination after the mandated verification.

Conclusion: The demand and penalty could not be finally sustained on the existing record and the matter was remanded to the original authority for de novo consideration after obtaining the Cost Accountant's report.

Final Conclusion: The appellate relief resulted in remand, leaving the merits open for fresh adjudication in accordance with the Board circular and the statutory verification process.

Ratio Decidendi: Where a binding circular requires verification by a nominated Cost Accountant before acceptance of reversal-based credit claims, an adjudication made without such verification is liable to be set aside and remanded for fresh consideration.

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