CESTAT rules in favor of M/s. DCM Engineering Ltd. and M/s. Guwahati Carbon Ltd.

The Appellate Tribunal CESTAT, New Delhi, dismissed the Revenue's appeals and allowed both appellants, M/s. DCM Engineering Ltd. and M/s. Guwahati Carbon Ltd., to retain the Modvat credit. The Tribunal found no evidence of intentional wrongdoing by either party, ruling in favor of the appellants and relieving them of the charges and penalties imposed by the adjudicating authority. The Tribunal also disposed of the cross objection in appeal No. 3728.

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The appellant, M/s. DCM Engineering Ltd., was accused by the Revenue of availing a higher amount of Modvat credit due to the addition of freight to the cost of goods from M/s. Guwahati Carbon Limited. The adjudicating authority directed M/s. DCM to repay the excess credit and imposed a penalty. M/s. Guwahati Carbon Ltd. was also penalized. Both appellants appealed to the Commissioner (Appeals), who ruled in their favor, relieving them of the charges and penalties. The Revenue appealed against this decision to the Appellate Tribunal CESTAT, New Delhi. The Tribunal found no evidence of intentional wrongdoing by either party and dismissed the Revenue's appeals, allowing both appellants to retain the Modvat credit. The cross objection in appeal No. 3728 was also disposed of. The ld. Counsel for M/s. DCM Engineering Ltd. argued that the duty paid by M/s. Guwahati Carbon Ltd. was genuine and that there was no unjust or illegal claim made by M/s. DCM. The Revenue's charges were focused solely on the inclusion of freight in the basic price, which increased the excise liability. With no evidence of questionable conduct, the Respondent DCM Engineering Ltd. was permitted to take credit for the duty paid. The Tribunal found no material against either respondent and dismissed the Revenue's appeals.

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