TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
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 overturns order on Modvat credit reversal, deems recovery unsustainable</h1> The tribunal allowed the appeal challenging the order confirming a demand and penalty by the Commissioner (Appeals), amounting to Rs. 2,20,549/- and Rs. ... Cenvat/Modvat credit Issues:1. Challenge to order confirming demand and penalty by Commissioner (Appeals).2. Applicability of Modvat credit rules on exempted final products.3. Interpretation of rules regarding reversal of Modvat credit.4. Comparison of judgments in different cases for credit recovery.5. Validity of recovery of duty and penalty.Analysis:1. The appellants contested an order confirming a demand and penalty by the Commissioner (Appeals) following an Order-in-Original by the Assistant Commissioner. The demand amounted to Rs. 2,20,549/- with a penalty of Rs. 50,000/-.2. The dispute revolved around the Modvat credit rules concerning exempted final products like audio cassettes. The Show-Cause-Notice proposed recovering Central Excise duty and imposing a penalty under relevant rules due to the balance of inputs and exempted final products in stock.3. The appellants argued that the judgment in the case of CCE, Rajkot v. Ashok Iron & Steel Fabricators supported their position, emphasizing the indefeasibility of validly taken credit unless illegally obtained. In contrast, the authorities relied on Albert David Ltd. v. CCE, Meerut, asserting that Cenvat credit should not apply to inputs used in exempted goods' manufacture.4. The comparison of decisions from different cases highlighted conflicting views on the recovery of credits for inputs used in exempted goods. The judgment in CCE, Shillong v. Goenka Woollen Mills provided further insight, emphasizing the inapplicability of certain rules to specific cases based on the period involved.5. Ultimately, the tribunal found that the proposed recovery of duty and penalty was unsustainable based on the judgment in Raghuvar (India) Ltd. v. CCE, Delhi, which clarified that Modvat credit could be reversed but not recovered. Consequently, the tribunal allowed the appeal, deeming the impugned order unsustainable.
TaxTMI 
TaxTMI 
