2002 (6) TMI 86 - AT - Central Excise

Tribunal adjusts duty demand, grants Modvat credit, and overturns penalty in appellant's favor.

The Tribunal confirmed the duty demand against the appellant but allowed adjustment for the amount already paid. Modvat credit was granted, reducing the ... Remand - Scope of de novo proceedings - Penalty - Imposition of Issues Involved:- Confirmation of demand of duty and interest- Imposition of personal penalty under rule 173Q of Central Excise Rules- Dispute over exemption notifications for wagons under 'Own Your Wagon Scheme'- Claim of Modvat credit for duty paid on inputs- Rejection of Modvat credit and limitation plea in de novo proceedings- Failure to comply with Tribunal's directions by the Commissioner- Judicial propriety and decorum in rendering judgment- Applicability of penalty under section 11AC- Disposal of appeal regarding duty, Modvat credit, and penaltyDetailed Analysis:1. The Commissioner confirmed the demand of duty and interest, along with imposing a personal penalty under rule 173Q of the Central Excise Rules. The appellant's dispute revolved around the availability of exemption notifications for wagons manufactured under the 'Own Your Wagon Scheme.'2. The Tribunal previously held that the appellant was entitled to Modvat credit for duty paid on inputs. However, in the de novo proceedings, the Commissioner rejected the Modvat credit claim and plea on limitation. The appellant challenged this rejection in the present appeal.3. The appellant withdrew the limitation plea, and the focus shifted to the rejection of Modvat credit. The appellant argued that the Commissioner disregarded the Tribunal's directions to verify documents and allow the credit, instead of expanding the scope of the show cause notice.4. The Commissioner's failure to comply with the Tribunal's directions was criticized for undermining judicial decorum. The Tribunal emphasized the importance of following higher appellate authorities' orders, citing previous Supreme Court decisions on judicial discipline and respect for legal structures.5. The Tribunal acknowledged the appellant's justified grievance against the Commissioner's actions, emphasizing the need for compliance with higher authorities' orders. The appellant's claim for Modvat credit was upheld, directing the Commissioner to adjust the duty accordingly after document verification.6. The penalty imposed under rule 173Q read with section 11AC was set aside, considering the bona fide nature of the dispute over exemption notifications for wagons under the scheme. The Tribunal emphasized that the penalty was unwarranted in this context.7. In summary, the Tribunal confirmed the duty demand against the appellant but allowed adjustment for the amount already paid. The Modvat credit was granted, reducing the duty quantum, and the penalty of Rs. 2,00,00,000 was overturned, concluding the appeal's disposition.