2007 (11) TMI 187

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....der Rule 174 of the Central Excise Rules, 1944. It is engaged in manufacture of PCC Poles falling under CH-68 of the Central Excise Tariff Act, 1985. Petitioner availed MODVAT Credit in terms of Rule 57A of the Rules in respect of input (Cement) used in the manufacture of PCC Poles. During the scrutiny of RT 12 returns, along with input invoices for the month April and May, 1995, it was noticed that during the said period, petitioner wrongly availed of MODVAT credit of Rs.78,830/- and utilised it for payment of duty on the final product. As a result, a notice was issued to the petitioner to Show Cause why the MODVAT credit amounting to Rs. 78,830/- be not disallowed and recovered under Rule 57-I read with Section 11-A of the Act and further....

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....on was filed which was rejected by the Tribunal vide Annexure-F holding that there was no error apparent either on the face of record or the order dated 9-12-1999. Hence present writ petition under .Article 227 as stated above. 4. Learned Counsel for the petitioner emphatically argued that firstly there was no breach so as to deny the MODVAT credit and assuming there was breach, it was of such a trivial nature, which could not have disentitled the petitioner the MODVAT Credit and further so as to recover it along with penalty. Placing reliance on Notification: 7/99-C.E.(N.T.), dated 09 Feb., 1999 it was contended that in view of insertion of sub-Rule (11) in Rule 57G, the denial of MODVAT Credit and consequent recovery is bad in law. ....

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....y-collecting procedure which provides relief to the manufacturer on the duty element borne by him in respect of the inputs used by him. The relief is given under the MODVAT Scheme on the actual payment of duty on the input. On such payment, the assessee gets a right to claim adjustment /set-off against the duty on the final product. Under MODVAT, excisable finished products made out of duty-paid inputs are given relief of excise duty to the extent of duty paid on inputs. The burden to prove the bona fides of defense is on the assessee and in this case the assessee has failed to prove his bona fides. In the case in hand, authorities, on appreciation of material, have found that petitioner failed to produce prescribed and relevant documents r....