2008 (1) TMI 788 - AT - Central Excise

Tribunal allows appeal due to lack of evidence and improper delegation of power.

The appeal was allowed by the Tribunal based on the lack of evidence regarding the specific iron and steel products used as raw materials, the ... Demand - Cenvat/Modvat Issues:1. Entitlement to Modvat credit and proforma credit on iron and steel materials.2. Limitation period for review order by Commissioner (Appeals).3. Evidence required to establish raw materials used in manufacturing steel angles.4. Delegation of power by the Original Authority in quantifying eligible credit.5. Applicability of Tribunal's decision in the case of M/s. Zakaria Steel Rolling Mills.Issue 1: Entitlement to Modvat credit and proforma credit on iron and steel materials:The appellant contended that they were entitled to Modvat credit on iron and steel materials purchased after a certain date and proforma credit on goods purchased before that date. The Commissioner (Appeals) was criticized for not addressing the issue of limitations in the order. The Tribunal noted the submissions but focused on the lack of evidence produced by the appellant to establish that the raw materials used were in the nature of specific iron and steel products. The Tribunal emphasized the need for documentary evidence to support the claim. The Tribunal also highlighted the delegation of power issue by the Original Authority in quantifying eligible credit, citing a precedent where such delegation was deemed inappropriate. Ultimately, following the Tribunal's decision in a similar case, the appeal was allowed with consequential relief.Issue 2: Limitation period for review order by Commissioner (Appeals):The appellant raised concerns about the review order's timing, suggesting it was beyond the limitation period. However, the Tribunal's focus was more on the lack of evidence regarding the nature of raw materials used in manufacturing steel angles rather than the procedural aspects related to the review order's timing.Issue 3: Evidence required to establish raw materials used in manufacturing steel angles:The Tribunal stressed the importance of producing necessary evidence to establish that the raw materials used were specific iron and steel products as claimed by the appellant. The lack of documentary evidence supporting the nature of inputs led the Tribunal to question the validity of the appellant's contentions.Issue 4: Delegation of power by the Original Authority in quantifying eligible credit:The Tribunal highlighted a concern regarding the Original Authority's delegation of power in quantifying eligible credit to a lower authority. Citing a relevant precedent, the Tribunal emphasized that such delegation was not permissible, as the duty demand confirmation required the Original Authority's direct involvement.Issue 5: Applicability of Tribunal's decision in the case of M/s. Zakaria Steel Rolling Mills:The Tribunal extensively referred to the decision in the case of M/s. Zakaria Steel Rolling Mills, emphasizing the similarities between the cases and the relevance of the precedent in determining the outcome of the appeal. The Tribunal found the facts of the present case substantially identical to the cited case, leading to the allowance of the appeal based on the principles established in the previous judgment.In conclusion, the Tribunal's decision focused on the lack of evidence regarding the nature of raw materials used, the inappropriate delegation of power by the Original Authority, and the applicability of a precedent in deciding the entitlement to credits and exemptions. The appeal was allowed based on these considerations, following the principles established in a similar case.