TaxTMI 
TaxTMI 
2005 (2) TMI 770
X X X X Extracts X X X X
X X X X Extracts X X X X
....iated against them vide SCN No. 11/2004, dated 18-3-2004, was admitted vide order No. 36/2004/C.Ex., dated 5-11-2004 which contains the full facts of the case. 2.1 The proceedings initiated proposed recovery of : (a) Duty liability to the tune of Rs. 20,33,720/- on the reimbursement, received by applicant company towards additional expenses incurred for import of raw materials by air. (b) Differential duty to the extent of Rs. 80,447 on account of price escalation. (c) Duty liability of Rs. 4,69,993 on notional interest waived Rs. 29,87,454/-, part of Rs. 5 crores taken as loan from HMIL at 18% interest. (d) Modvat credit to the ext....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tri. - Delhi)]. 4. With reference to the proposal for recovery the Modvat credit availed on capital goods on the grounds that that were not owned by the applicant company, he submitted that the ownership of the inputs or the capital goods is not a pre-requisite for taking credit provided the documents based on which credit was taken were in order and conditions prescribed for availing the credit were satisfied. To support his claim that ownership is not a pre-requisite for entitlement of credit in respect of capital goods, he cited the decision of CEGAT in (a) HST Automotives Ltd. v. CCE, Chennai, 2004 (163) E.L.T. 116 (T) = (Order No. 575/2003, dated 11-7-2003) (b) Sharda Motors Ltd. v. CCE, Chennai II, 2002 (150) E.L.T. 759 (T) = ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s no stay on the said decision. With reference to the duty liability on notional interest on the loan component, he stated that had the applicant taken loan from the Bank, he would have incurred an expenditure of interest and hence the waiver of interest by HMIL is an additional consideration received by the applicant. 6. We have examined the contentions of both the sides carefully. The department did not contest the submissions made by the Consultant that the loan was taken subsequent to the price fixation and as such it had no effect on the price and therefore there is no nexus between the price and the loan. In view of this the departmental attempt to load the assessable value with notional interest waived on the part loan is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....resaid decision of the Tribunal is binding on the department. Moreover, the Board's circular referred to by the Tribunal in their decision is binding on the department as per the Apex Court judgment in the case of Ranadey Micronutrients v. CCE, 1996 (87) E.L.T. 19 (S.C.). 7. In view of the above, we are inclined to accept the arguments of the Consultant in respect of the two disputed demands discussed above. Since the admitted duty liability has been paid by them immediately on being pointed out and before issue of SCN and since they have come out with true disclosure of duty liability and cooperated with the proceedings in the Settlement Commission, their request for immunities merits favourable consideration. 8. Accordingl....