2001 (1) TMI 359 - AT - Central Excise

Tribunal Grants Stay on Payment in Modvat Credit Case

The appellate tribunal granted stay of payment of approximately Rs. 35,000 in a case involving Modvat credit utilization. The appeal was admitted based on ... Recovery of MODVAT credit - application of Section 35F of the Central Excise Act - effect of Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. (Supreme Court) on MODVAT recovery - inherent powers to grant stay of collectionRecovery of MODVAT credit - application of Section 35F of the Central Excise Act - effect of Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. (Supreme Court) on MODVAT recovery - Prima facie conclusion on whether Section 35F can be resorted to for recovery of MODVAT credit after the Supreme Court's decision in Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. - HELD THAT: - The Tribunal observed that the Supreme Court in Collector of Central Excise, Jaipur v. Raghuvar (India) Ltd. held that Section 11A cannot be used for recovery of MODVAT credit. Applying that principle, the Tribunal reached a prima facie view that resort to Section 35F for recovery in MODVAT matters appears impermissible after the said Supreme Court pronouncement. The Tribunal noted that this question requires further consideration on the merits, but on a prima facie reading the use of Section 35F in MODVAT recovery is questionable in light of the Raghuvar decision.On prima facie consideration, Section 35F should not be resorted to for recovery of MODVAT credit post the Raghuvar decision, although the point is left open for full adjudication.Inherent powers to grant stay of collection - Whether stay of collection of the disputed amount should be granted and the appeal admitted. - HELD THAT: - The Tribunal, invoking its inherent powers and having regard to the extraordinary circumstances including that full relief had been granted in earlier proceedings by the appellate authority, directed a stay of the collection of the disputed amount during the pendency of the appeal. The Tribunal exercised its discretion to admit the appeal and to suspend recovery pending final adjudication.Stay of collection of the disputed amount granted during the pendency of the appeal, and the appeal admitted.Final Conclusion: The Tribunal admitted the appeal and, invoking inherent powers, granted a stay of collection of the disputed amount during the appeal; it recorded a prima facie view that Section 35F ought not be used for recovery of MODVAT credit in the light of the Supreme Court's decision in Raghuvar, while leaving the question open for full consideration. The appellate tribunal granted stay of payment of approximately Rs. 35,000 in a case involving Modvat credit utilization. The appeal was admitted based on the Supreme Court judgment that Section 35F cannot be used for Modvat credit recovery. The tribunal invoked inherent powers to grant the stay during the appeal process.