2003 (1) TMI 625 - AT - Central Excise

CEGAT Kolkata remands dispute on Modvat credit for footwear manufacture, directs re-crediting unutilized amount

The Appellate Tribunal CEGAT, Kolkata allowed the appeal by way of remand in a dispute concerning the reversal of Modvat credit for footwear manufacture. ... Modvat credit - utilisation of un-utilised credit - duty to pass adjudication order after issuance of show-cause notice - speaking and reasoned order - remand for fresh adjudicationDuty to pass adjudication order after issuance of show-cause notice - speaking and reasoned order - Whether the Commissioner was obliged to pass an adjudication order, with opportunity to the appellants to be heard, in respect of the claim for re-credit of un-utilised Modvat credit. - HELD THAT: - The Tribunal found that the Commissioner, when approached by the appellants for re-credit of credit lying un-utilised in RG 23A Part II, could not decline to pass any adjudication on the ground that the issue was not earlier before him. The Court held that where a request for re-credit is made, the Commissioner was duty bound to issue a show-cause notice and pass a detailed, speaking and reasoned adjudication after considering the appellants' submissions and the relevant authorities. The impugned communication, being a letter conveying a decision without adjudicatory process or opportunity to the appellants, did not satisfy this obligation.The Commissioner was obliged to issue a show-cause notice and pass a detailed, speaking and reasoned adjudication on the appellants' request for re-credit of un-utilised Modvat credit.Utilisation of un-utilised credit - remand for fresh adjudication - Whether the matter should be remanded for fresh consideration by the Commissioner in view of the absence of a speaking adjudication. - HELD THAT: - The Tribunal noted that the appellants had been prevented from utilising the Modvat credit and had placed the credit on record in RG 23A Part II. Because the Commissioner had not afforded an adjudicatory opportunity nor issued a reasoned order addressing the appellants' claim, the appropriate course was to remit the matter. The Court directed that the Commissioner consider the appellants' request afresh, after issuing a show-cause notice and giving the appellants an opportunity to make submissions, and then pass a reasoned order taking into account the relevant case law and facts.Appeal allowed by way of remand; the matter is remitted to the Commissioner to consider the appellants' request and pass a detailed, speaking order after issuing a show-cause notice and hearing the appellants.Final Conclusion: The appeal is allowed by setting aside the non-adjudicatory communication; the matter is remitted to the Commissioner who must issue a show-cause notice, consider the appellants' submissions and relevant authorities, and pass a detailed, speaking and reasoned adjudication on the claim for re-credit of un-utilised Modvat credit. The Appellate Tribunal CEGAT, Kolkata settled a dispute regarding the reversal of Modvat credit for footwear manufacture. The appellant was directed not to use the credit until finalization of proceedings. The Tribunal directed the Commissioner to pass a detailed order on re-crediting the unutilized amount in the PLA. The appeal was allowed by way of remand.