2012 (7) TMI 262 - AT - Central Excise

Tribunal rules for appellants in modvat credit appeal, remands for fresh penalty decision.

Ashok Leyland Ltd. Versus Commissioner of Central Excise, Nagpur

The Tribunal ruled in favor of the appellants in an appeal against the denial of modvat credit and penalty imposition on imported goods. The appellants ... Denial of credit of CVD paid in respect of 4 Bills of Entry - Held that:- The appellants produced evidence by way of certificate from the Range Supdt. that credit had not availed by the importing unit and also produced chartered accountant's certificate that the draw back of CVD has not been claimed by the importing unit. This evidence was not before the Commissioner(Appeals), thus the impugned order denying the credit is set aside and the matter is remanded back to decide afresh - in favour of assessee by way of remand. Issues:Appeal against disallowance of modvat credit and penalty imposition on imported goods due to lack of declaration on Bill of Entry for availing credit under Rule 57-A.Analysis:The appellants filed an appeal against the Commissioner(Appeals) order disallowing modvat credit of Rs. 50,90,227/- and imposing a penalty of Rs. 6 lakhs. The issue arose from the denial of credit of countervailing duty (CVD) paid in respect of 4 Bills of Entry for goods imported by M/s. Ashok Leyland, Madras. The Commissioner(A) confirmed the denial of credit and imposed a penalty, which was upheld in the initial appeal. However, the Tribunal remanded the matter for fresh consideration. The Commissioner(A) based the denial on the importer's failure to subscribe to a declaration on the Bill of Entry as required by CBEC circulars. Without the declaration, claiming modvat credit would result in a double benefit, which is impermissible. The appellants contended that they obtained a certificate from the Range Superintendent confirming that the importing unit had not taken credit for the Bills of Entry in question, refuting the Commissioner(A)'s findings. They argued that the circular cited was not applicable as there was no allegation of seeking a refund of CVD. Additionally, a Chartered Accountant certificate confirmed that no duty drawback of CVD was claimed for the Bills of Entry. The Revenue argued that at the time of the impugned order, no evidence was presented to refute the Commissioner(A)'s findings, justifying the demand.The Tribunal found in favor of the appellants, noting that they provided evidence, including the Range Superintendent's certificate and the Chartered Accountant's certificate, which was not before the Commissioner(A). As a result, the impugned order disallowing the credit was set aside, and the matter was remanded back to the Commissioner(A) for a fresh decision on the 4 Bills of Entry. The issue of penalty imposition was also to be reconsidered. The appeal was disposed of by way of remand, granting the appellants an opportunity for a fair hearing and decision on the matter.