2003 (4) TMI 485

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....r Notification No. 5/94, dated 1-3-94. The Department, by letter dated 29-7-1997, directed them to limit the credit to 10% in terms of Notification No. 14/97, dated 3-5-97. The party complied with this direction without any whisper of protest. However, subsequently, they took recredit to the FULL extent of 15%. This was on 4-6-99, at a time when the maximum limit of Modvat credit that could be taken on the above oils, stood fixed at 10% with retrospective effect from 1-3-94 as per notification No. 14/97-C.E. ibid which amended Notification No. 5/94 ibid. At this juncture, the Department issued a show cause notice to the appellants, which was replied to, but no satisfactory explanation was given in the reply as to why the recredit of Rs. 47,....

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....ead that the direction contained in the Department's letter dated 29-7-97 was not legally enforceable for want of regular show cause notice. The learned DR further argues that the plea of non-applicability of the notifications to the inputs under reference was not taken by the assessee at any stage prior to the present appeal. Even in their reply to the show cause notice, the assessee did not satisfactorily explain as to why they had taken recredit on the inputs after a long time since the date of reversal of the original credit. 4. I have carefully examined the submissions. It is not in dispute that the appellants had originally taken Modvat credit to the extent of 15% on the inputs claiming under Notification No. 5/94-C.E., dated ....

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....ave waived show cause notice in respect of the excess credit taken. The allegation raised in the show cause notice for denying the Modvat credit taken on 4-6-99 was that the credit was taken without any valid duty paying  documents required under Rule 57G. There is no satisfactory answer to this allegation till this stage of the proceedings. The allegation will, therefore, stand vindicated and consequently the department's case will succeed. The learned Counsel has relied on the following decisions of the Tribunal : Veera Spinning Mills v. CCC [2001 (131) E.L.T. 437 (Tribunal) = 2001 (46) RLT 333] Elgitread (India) Ltd. v. CCE [2002 (149) E.L.T. 1012 (Tribunal) = 2002 (53) RLT 1052] In the first of the above two cases, a Two M....