TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether the Revenue could recover an amount equivalent to Modvat credit already utilized on inputs lying in stock or contained in finished goods as on the date of switch-over to the compounded levy scheme; (ii) whether the demand of differential duty on transportation cost was barred by limitation.
Issue (i): whether the Revenue could recover an amount equivalent to Modvat credit already utilized on inputs lying in stock or contained in finished goods as on the date of switch-over to the compounded levy scheme
Analysis: The relevant notification provided only that unutilized credit remaining with the manufacturer on 1 August 1997 would lapse and could not be used for payment of duty. The Court noted that the notification did not authorise recovery of an amount equal to credit already taken and utilized. The cited Tribunal decisions had also taken the view that such recovery was not open to the Revenue.
Conclusion: The demand for reversal of credit was unsustainable and is decided in favour of the assessee.
Issue (ii): whether the demand of differential duty on transportation cost was barred by limitation
Analysis: The show-cause notice covered the period March to July 1997, but no specific plea of suppression or misstatement with intent to evade duty was made in the notice. The Court held that invocation of the longer limitation period under the excise law required specific pleading and proof of suppression, which was absent.
Conclusion: The demand on transportation cost was time-barred and is decided in favour of the assessee.
Final Conclusion: Both demands failed in law, and the assessee obtained complete relief against the impugned order.
Ratio Decidendi: A notification providing for lapse of unutilized credit on a scheme change does not authorise recovery of credit already utilized, and the extended limitation period under excise law cannot be invoked without specific pleading and proof of suppression with intent to evade duty.
TaxTMI 
