TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal upholds disallowance of Modvat credit reversal & penalty for unauthorized transfer.</h1> <h3>CHLOCHEM LTD. Versus COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD</h3> CHLOCHEM LTD. Versus COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD - 2004 (164) E.L.T. 336 (Tri. - Mumbai) Issues:1. Disallowance of Modvat credit and imposition of penalty by Assistant Commissioner.2. Transfer of Modvat credit without obtaining requisite permission.3. Barred by limitation regarding the notice proposing to deny credit.4. Interpretation of Rule 57-I regarding the transfer of duty credit.5. Dismissal of the appeal.Issue 1: Disallowance of Modvat credit and penalty impositionIn the impugned order, the Assistant Commissioner disallowed the reversal of Modvat credit amounting to Rs. 4,06,921.16 and imposed a penalty of Rs. 5,000 on the appellant. The Commissioner (Appeals) found it impossible to interfere with the Assistant Commissioner's decision.Issue 2: Transfer of Modvat credit without permissionThe appellant shifted its factory without obtaining necessary permission and transferred the Modvat credit to the new factory. The notice issued to the appellant proposed actions based on this ground, leading to the disallowance of credit and penalty imposition.Issue 3: Barred by limitationThe appellant argued that the notice denying credit was time-barred as it was issued beyond six months from the date of taking credit. However, the grounds presented by the appellant were considered contradictory by the Tribunal, as the factory shift and credit transfer timeline did not support the limitation argument.Issue 4: Interpretation of Rule 57-IThe notice to the appellant invoked Rule 57-I, with the Tribunal determining that sub-rule (2) applied in this case rather than sub-rule (1). The Tribunal clarified that sub-rule (1) pertains to errors or omissions, while sub-rule (2) deals with the disposal of inputs when shifting factories. The Tribunal concluded that there was no provision for the act of transferring inputs between factories, thus rejecting the appellant's contention.Issue 5: Dismissal of the appealUltimately, the Tribunal dismissed the appeal, upholding the decision of the Assistant Commissioner and Commissioner (Appeals) regarding the disallowance of Modvat credit and penalty imposition due to the unauthorized transfer of credit without requisite permission and the inapplicability of the limitation argument based on Rule 57-I interpretation.
TaxTMI 