2004 (1) TMI 431 - AT - Central Excise

Tribunal resolves appeals on Modvat credit for exported goods, emphasizes compliance

MILTAN POLYPLAST PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE

The Tribunal disposed of both the Revenue and assessee's appeals challenging the Commissioner's order-in-appeal through a common order. The primary issue ... Appeal to Commissioner (Appeals) - Procedure - Cenvat/Modvat Issues:1. Appeal filed by Revenue and assessee against the same order-in-appeal by the Commissioner.2. Availing Modvat credit on common inputs for manufacturing goods cleared on payment of duty and exported under bond.3. Reversal required on goods exported under unconditional exemption but duty shown.4. Recovery ordered by lower authorities and penalty imposed.5. Compliance with pre-deposit terms for appeal hearing.6. Goods exported under bond not exempt from duty as per legal precedents.7. Order set aside for re-determination on merits after compliance with pre-deposit terms.Analysis:1. The appeal involved both the Revenue and the assessee challenging the same order-in-appeal by the Commissioner. The Tribunal decided to dispose of both appeals through a common order.2. The primary issue revolved around the assessee availing Modvat credit on common inputs used for manufacturing goods cleared on payment of duty and exported under bond. The question arose regarding the reversal required on goods exported under unconditional exemption but with duty shown.3. The lower authorities had ordered the recovery of a specific amount and imposed a penalty as per the relevant rules. The Commissioner (Appeals) modified the original order to reduce the duty liability to the extent of actual Modvat credit availed on the impugned goods.4. The Tribunal emphasized the importance of compliance with pre-deposit terms before an appeal can be taken up for decision. The order highlighted the necessity of crossing the threshold of Section 35F for appeal hearing.5. Legal precedents were cited regarding goods exported under bond not being exempt from duty, as established by various court decisions and Tribunal views. The matter was remitted back to the Commissioner for re-determination on merits after ensuring compliance with pre-deposit terms.6. The Tribunal set aside the impugned order and allowed the appeals for remand for de novo adjudication. The Commissioner was directed to first pass an order on waiver after hearing the assessee, ascertain compliance with pre-deposit terms, and then decide the issues on merits.7. The parties were granted the liberty to raise their pleas before the Commissioner for final hearing and determination. The Commissioner was given discretion to waive pre-deposit in full and proceed with hearing the assessee on merits for a comprehensive resolution of the matter.