2002 (6) TMI 562

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....V/15/15/2001-CX. Adj. by the Commissioner of Central Excise, Chennai-1 was allowed to be proceeded with by this Bench's Admission Order No. 7/2002(CE), dated 20-2-2002. 2. A final hearing in the aforesaid case was taken up by the Bench on 24-5-2002 and 28-5-2002, when Shri Shankar Raman, Advocate appeared on behalf of the applicant and Shri K. Chandrasekaran, Supdt. represented the Revenue. 3. The Bench has gone through the facts and relevant records of the case, as also the evidences and citations relied upon. The brief facts of the case are already incorporated and discussed in the aforesaid Admission Order. In short, the issue relates to non-reversal of Modvat Credit of Rs. 24,07,505/-, availed on receipt of certain inpu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....this request in the application, it has been pleaded by the Advocate of the applicant during the final hearing on 28-5-2002 that in terms of Rule 57-I(5) of the erstwhile CER as it stood during the material time, no interest would be chargeable in the instant case. It was pleaded that liability to interest under the said Rule 57-I (5) arises only when a credit was availed wrongly. However, in the instant case on the date of availment (taking) of Modvat Credit, the applicant was correctly entitled to avail the same. Some of the materials were also used for the manufacture of final production. The remaining material could not be used only due to their short shelf  life  and, consequently,  they  became waste. Accordingly, ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Section 11A on its own terms have no application or operation to cases covered under Rule 57-I of the CER, 1944. Accordingly, even after, as a matter of fact more so after, the amendment of Rule 57-I to build therein provision for time limit for recovery, the provisions of Section 11A will not apply at all to case of recovery under Rule 57-I of Modvat credit incorrectly availed. Therefore, ab initio, the proposal to demand under proviso to Section 11A read with sub-rule 1(ii) of erstwhile Rule 57-I in the SCN is questionable. In this case the allegation being that the applicant had cleared modvatted inputs without payment of duty as provided for under the Rules, the erstwhile Rule 57-I(2) empowered demand in respect of such inputs (on whi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....h less on account of the aforesaid reasons such as fraud, wilful mis-statement etc. Therefore, the Bench observes that proposal in the SCN to demand interest in terms of Section 11AB of the CEA read with sub-rule 57-I(5) of the erstwhile CER is, ab initio, not valid. 9. As for the request for immunity from prosecution, the counsel has brought on record instructions of the Central Board of Excise and Customs that the monetary limit for launching prosecution is enhanced to Rs. 25 lakhs (Board's letter F.No. 208/31/97/CX. 6, dated 12-12-97). Considering this and the duty involved in the instant case being less than Rs. 25 lakhs, the Bench concludes that the instant case falls outside the monetary limit laid down for prosecution by the ....