2010 (4) TMI 486 - AT - Central Excise

Court Upholds Duty Credit for Imported Generators, Emphasizes Procedural Compliance and Equitable Considerations

The High Court dismissed the Department's appeal regarding the eligibility of Cenvat credit for imported generators, upholding the respondent's claim for ... Rectification of mistake - Limitation - Delay in filing application by department. Application for rectification of mistake is required to be filed within six months from the date of the order and admittedly application in this case has been filed late and hence the COD application has been filed. It is settled law that the Tribunal cannot decide the application for rectification of mistake or cannot rectify the mistake if the application is not filed within six months from the date of the order. Held that - revenue filed appeal before Gujrat High Court instead of filing application for rectification of mistake, which was the proper course of action. Therefore, it cannot be said that there is a delay in view of fact that appeal was pending before High Court. In the interest of justice, condonation of delay in filing ROM application allowed. Issues involved:- Eligibility of Cenvat credit for imported generators- Availment of Cenvat credit in subsequent years- Department's appeal against the decision- Application for rectification of mistake and condonation of delayEligibility of Cenvat credit for imported generators:The respondent received generators originally imported by another company in their factory. The installation of the generator occurred after the removal of the ceiling on credit of duty for capital goods. The respondent claimed 50% of the total duty paid during 2000-2001, which was allowed by the original authority and Commissioner (Appeals). The Department appealed this decision to the Tribunal, which ruled in favor of the respondent. Subsequently, the Department's appeal to the High Court was dismissed. The original authority allowed the remaining 50% of the duty in April 2001, which was upheld by the Commissioner (Appeals). The Department appealed on the issue of the balance of credit taken in 2001-02.Availment of Cenvat credit in subsequent years:The Tribunal noted a similar instance decided in favor of the assessee by the High Court of Gujarat and the Department's SLP before the Supreme Court. However, neither party informed the Tribunal that the Supreme Court had already decided the issue. The Tribunal's decision was rendered based on this information. The Department later filed an application for rectification of mistake and condonation of delay, citing the Supreme Court's decision.Department's appeal against the decision:The Revenue filed a tax appeal, and the Gujarat High Court observed that the Supreme Court had set aside its decision. The Revenue sought rectification of the order due to the Supreme Court's decision not being brought to the Tribunal's notice during the appeal. The Tribunal considered the application for rectification of mistake and condonation of delay, emphasizing the importance of observing statutory limitations but also allowing rectification if sufficient cause is shown. The Tribunal granted the application for condonation of delay, directing the listing of the rectification application for further clarification.This judgment highlights the procedural aspects of availing Cenvat credit, the significance of timely filing applications for rectification of mistakes, and the Tribunal's discretion in allowing condonation of delay based on the circumstances and principles of justice and fair play.