Excisability of generator sets assembled at site upheld, with duty and penalty sustained and Modvat credit remanded.

Generator sets assembled at site were treated as excisable goods already classified under Heading 85.02, so clearance without duty payment justified the confirmed duty demand and penalty. The Tribunal also sustained the penalty because the assessee was aware that the item was dutiable yet removed it without payment. Separately, the assessee's Modvat credit claim had earlier been remanded for de novo consideration, and that issue was again sent back to the original authority for fresh examination. The result was that the duty demand and penalty were upheld, while the Modvat credit claim required reconsideration on remand.

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Issues: (i) Whether the generator set assembled at site was excisable goods and the duty demand and penalty were sustainable; (ii) Whether the assessee's claim for Modvat credit was required to be reconsidered.

Issue (i): Whether the generator set assembled at site was excisable goods and the duty demand and penalty were sustainable.

Analysis: The Tribunal noted that in the assessee's own earlier matter, electric generator sets had already been held to be goods classifiable under Heading 85.02 and, therefore, dutiable. In that backdrop, the clearance of the goods without payment of duty justified the confirmed duty demand. The penalty was also upheld because the assessee was aware that the item was dutiable yet cleared it without duty payment.

Conclusion: The duty demand and the penalty were sustained against the assessee.

Issue (ii): Whether the assessee's claim for Modvat credit was required to be reconsidered.

Analysis: The earlier order in the assessee's own case had remanded the matter for de novo consideration of Modvat credit, and similar relief had been granted in cited Tribunal decisions. On that basis, the plea for Modvat credit was treated as one requiring examination by the original authority.

Conclusion: The matter was remanded to the original authority to reconsider the claim for Modvat credit.

Final Conclusion: The duty and penalty were upheld, but the assessee obtained a remand for fresh consideration of Modvat credit.

Ratio Decidendi: Where the goods are already held to be excisable and cleared without duty payment, duty demand and penalty may be sustained, while a separately remanded Modvat credit claim must be reconsidered by the original authority.

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