2000 (10) TMI 98 - AT - Central Excise

Appellate Tribunal allows Modvat credit for manufacturing company, sets aside disallowance order.

The Appellate Tribunal CEGAT, Mumbai allowed the appeal of a company engaged in manufacturing portland cement, granting Modvat credit and setting aside ... Modvat credit - liability of purchaser for seller's mistakes - alternative imposition of liability - requirement of specific speaking orders - right to hearing under Section 35FModvat credit - liability of purchaser for seller's mistakes - requirement of specific speaking orders - Modvat credit wrongly denied and alternatively fastened on the assessee despite finding that the assessee was not at fault - HELD THAT: - The adjudicating authority found that the assessee was not blameworthy for errors attributable to the seller and recorded that Modvat credit should not be denied to the assessee if eligibility under the Rules was otherwise satisfied. Despite that finding, the authority proceeded to disallow a portion of the Modvat credit and to fasten liability alternatively on the assessee. The Tribunal agreed with the assessee's submission that a purchaser should not be punished for the seller's mistakes and that assessment orders must be specific; having accepted that the assessee was not at fault, the alternative imposition of liability was unsustainable. The Tribunal therefore set aside the impugned order and granted the Modvat credit, allowing consequential relief to the assessee. [Paras 2, 3, 7]Impugned order set aside and Modvat credit granted to the assessee; appeal allowed with consequential relief.Right to hearing under Section 35F - requirement of specific speaking orders - Commissioner (Appeals) dismissed the assessee's application under Section 35F without hearing or addressing merits, and that order was set aside - HELD THAT: - The Commissioner (Appeals) dismissed the assessee's Section 35F application without calling for a hearing and without discussing the merits. The Tribunal noted this omission and that the appellate order did not engage with the aspects which had led the adjudicating authority to record that the assessee was not at fault. For these reasons the Tribunal set aside the impugned appellate order and proceeded to grant relief to the assessee. [Paras 4, 7]Order of Commissioner (Appeals) set aside for not hearing or discussing merits; relief to the assessee granted.Final Conclusion: Appeal allowed; impugned orders set aside, Modvat credit granted to the assessee and consequential relief directed; stay petition disposed of. The Appellate Tribunal CEGAT, Mumbai allowed the appeal of a company engaged in manufacturing portland cement, granting Modvat credit and setting aside the order disallowing the credit. The Tribunal held that the company should not be penalized for mistakes made by sellers, specifically Indian Oil Corporation Ltd. The Commissioner (Appeals) had dismissed the application without discussing the merits, leading to the appeal being allowed in favor of the assessee.