Modvat credit demand fails where RT-12 assessments stood accepted and no proof of wrongful utilisation was produced.

A demand based on alleged wrongful utilisation of Modvat credit could not be sustained where RT-12 returns had been assessed without objection and the department failed to produce material showing proper finalisation of assessment or supporting evidence of misuse. The order under challenge was therefore found unsustainable, and the demand was held not maintainable. The impugned order was set aside in favour of the assessee.

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Issues: Whether the demand was sustainable when the RT-12 returns had been assessed without objection and the department had not established, on the facts, that the credit was wrongly utilised after any proper final assessment.

Analysis: The appeal turned on the effect of the RT-12 assessments and the department's failure to place material showing that the assessment had been finalised in the manner required before a demand could be raised. The order under challenge proceeded on the basis of the declarations filed by the assessee, but no positive evidence was brought on record to justify a later demand on the footing of misuse of Modvat credit. In these circumstances, the view taken by the adjudicating authority was found unsustainable.

Conclusion: The demand was held not to be maintainable and the impugned order was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessee obtained the resulting relief in law.

Ratio Decidendi: A demand cannot be sustained where the department fails to establish proper finalisation and supporting evidence before alleging wrongful utilisation of credit after assessment.

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