Modvat credit reversal letter is not appealable, but revenue must pursue any demand through proper adjudication.

A Superintendent's letter directing reversal of Modvat credit was treated as not being an appealable order, so the Commissioner (Appeals)'s rejection of the appeal on that ground was upheld. However, the letter was also held not to be a proper substitute for adjudication, leaving the revenue free to initiate fresh proceedings in accordance with natural justice. The note therefore clarifies that such a communication may not itself support an appeal, but any substantive demand or reversal should be pursued through due adjudicatory process.

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Issues: Whether a letter issued by the Superintendent directing reversal of Modvat credit is an appealable order.

Analysis: The letter was held not to be an appealable order and the view of the Commissioner (Appeals) rejecting the appeal on that basis was found to suffer from no infirmity. At the same time, such a letter was also held not to be a proper substitute for adjudication, and the authorities were left free to initiate proceedings in accordance with natural justice.

Conclusion: The letter directing reversal of Modvat credit was not an appealable order, but the revenue authorities could start adjudication proceedings by following the principles of natural justice.

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