2009 (3) TMI 766 - AT - Central Excise

Tribunal Upholds Commissioner's Decision on Denial of Notification Benefit

The Tribunal upheld the decision of the Commissioner (Appeals) in a case involving the denial of the benefit of Notification No. 38/97-C.E. to the ... Adjudication - Show Cause Notice Issues:1. Availing benefit of Small Scale Exemption Notification No. 16/97-C.E. and Notification No. 38/97-C.E.2. Denial of benefit of Notification No. 38/97-C.E. due to non-fulfillment of conditions.3. Appeal against the condition imposed by Commissioner (Appeals) regarding reversal of credit.4. Acceptance of alternative prayer by Commissioner (Appeals) and its implications.Analysis:1. The appellants were involved in the manufacture of PVC Hose pipes and initially availed the benefit of Small Scale Exemption Notification No. 16/97-C.E., which required not availing Modvat credit. Subsequently, they started availing the benefit of Notification No. 38/97-C.E., which allowed availing Modvat credit. The Revenue issued a Show Cause Notice to deny the benefit of Notification No. 38/97-C.E. due to a condition related to filing a declaration not being fulfilled.2. The appeal against the order was made by the appellants, acknowledging the ineligibility for the benefit of Notification No. 38/97-C.E. However, they requested to continue availing the benefit of Notification No. 16/97-C.E. The Commissioner (Appeals) accepted this alternative prayer with the condition that the credit availed should be reversed. The appellants contested this condition, arguing that the Show Cause Notice did not propose denial of credit, thus it cannot be reversed by the Commissioner (Appeals).3. The Tribunal found no merit in the appellant's contention, stating that the continuation of availing the benefit of Notification No. 16/97-C.E. was the appellant's own alternative prayer, not the subject of the dispute before the Commissioner (Appeals). The acceptance of the alternative prayer by the Commissioner (Appeals) required fulfilling the condition of not availing the credit, which was a subsequent development after the Show Cause Notice.4. Ultimately, the Tribunal rejected the appeal, emphasizing that the condition imposed by the Commissioner (Appeals) regarding the reversal of credit was valid based on the acceptance of the alternative prayer by the appellants. The Tribunal concluded that there were no merits in the appeal, thereby upholding the decision of the Commissioner (Appeals).This judgment clarifies the implications of availing different notifications and the consequences of alternative prayers accepted during the appellate process, highlighting the importance of complying with conditions attached to such benefits.