TaxTMI 
TaxTMI 
2016 (7) TMI 798
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....lity and taking MODVAT credit in respect of various inputs including cullet and other waste scrap of glass in terms of the provision of the Central Excise Rules, 1944. 2.2 The Appellant for modernization of the unit applied for a loan of Rs. 75 lakhs from the Uttar Pradesh Finance Corpn. (UPFC). UPFC vide its letter dated 05.1.1996 sanctioned the said loan to the Petitioner for the said amount of Rs. 75 lakhs. As a security to the said loan, the Appellant mortgaged the property situated at Plot No. 429 at Village Mehrabad, Shikohabad, UP. It is pertinent to note that only Plot No. 429 (and not Plot No. 428) was mortgaged as a collateral security, It is submitted that the other Plot No. 428 was mortgaged not as security to the loan given by UPFC but for getting free and proper approach to Plot No. 429. It is submitted that the Appellant had out of the said loan amount of Rs. 75 lakhs had paid up about Rs. 30 lakhs of the loan (principal plus interest) and thereafter due to financial crunch defaulted in payment of instalment to the UPFC for reasons beyond his control and as such UPFC auctioned the mortgaged plots. 2.3 That the relevant period under consideration of the pr....
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....nufactured and then applying the said ratio to the quantity of exempted final product manufactured. The quantity of cullet and other waste and scrap of glass' so consumed in the manufacture of final products which were chargeable to duty and other final products which were not chargeable to duty, as calculated, is shown in the following chart: Chart - A Month Amount of Modvat credit avalled Rs. Total wt. Of cullet consumed MT Total wt. Of final products mfd. MT Ratio of Cullet & final product mfd. wt. Of dutiable goods mfd. MT Wt. Exempt ed goods mfd. MT Wt. Of cullet consumed in dutiable goods MT Wt. Of cullet consumed in exempt ed goods MT 1 2 3 4 5 6 7 8 9 Dec/97 7,404.00 36.936 427.405 0.0864052 364.545 62.860 31.499 5.431 Jan/98 12,527.00 53.215 644.900 0.0825167 530.090 114.810 43.740 9.474 Feb/98 16,758.00 80.820 755.993 0.1069058 683.678 72.315 73.089 7.731 Mar/98 3,356.00 11.300 750.370 0.0150592 624.760 125.610 9.408 1.892 TOTAL 40,056.00 182.668 2,578.668 2,203.073 375.595 1....
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.... 8% on the total value (Rs. 1,16,78,603/-) of the said exempted goods worked out to Rs. 9,34,288/-) which was payable by the Appellant. Instead, they reversed an amount of Rs. 5,473/- only. Hence they were liable to reverse the balance amount of Rs. 9,28,815/- or pay the said amount in cash. 2.10 The Deputy Commissioner of Central Excise, Agra decided the case vide his Order-in-Original No. 87/DC/DMD/15/2000 dated 23.02.2000 and held that the Applicant was required to pay an amount equal to 8% of the value of the said exempted goods cleared from the factory as per provisions of sub-rule (1) of rule 57CC of the Central Excise Rules, 1944 as Modvat credit was availed in respect of input used in the manufacture of the same. He confirmed the demand of an amount of Rs. 9,28,815/-(after deducting the amount of Rs. 5,473/already reversed through RG23A from Rs. 9,34,288/-), the amount calculated at the rate of 8% of the exempted goods manufactured), and ordered payment of the said amount from the RG 23 A Pt. II Account or through cash. He also imposed a Penalty of Rs. 1,00,000/- under Rule 173 Q of the Central Excise Rules, 1944. 2.11 Applicant, after rejection of his appeal by the I....
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....interest at the rate of twenty four per cent per annum from the date of clearance of goods till the date of payment of the said amount." 3.2 The procedure for opting to pay the amount in accordance with the provisions of the Central Excise Rules, 1944 as amended by subsection (1) is laid down in sub-section (2) and (3) of Section 69 of the Finance Act, 2010 which reads as under: "(2) Where a person opts to pay the amount in accordance with the provisions of the Central Excise Rules, 1944, as amended by sub-section (1), he shall pay the amount along with interest specified thereunder and make an application to the Commissioner of Central Excise along with documentary evidence and a certificate from a Chartered Accountant or a Cost Accountant certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of the final products, which are exempted from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty within a period of six months from the date on which the finance Bill, 2010 receives the assent of the President. (3) The Commissioner of Central Excise shall on receipt of an application und....
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....at credit in respect of inputs used in or in relation to the manufacture of final products. During the period from December, 1997 to March 1998, he used cullet and other waste and scrap of glass' in the manufacture of glass & glass ware, both, which were chargeable to duty and also other glass & glassware which were not chargeable to duty (exempted from duty) but did not maintain separate accounts as required under sub-rule (9) of rule 57CC of erstwhile Central Excise Rules, 1944. He, however, calculated the amount of credit attributable to the inputs (cullet and other waste and scrap of glass') used in the manufacture of final products (glass & glassware) which were exempted from duty/not chargeable to duty on prorata basis according to the weight of dutiable and non-dutiable final products manufactured. The amount so calculated was paid by making a debit entry in the RG23 Pt. Il account as under: Sl No. Month Amount Calculated on prorate basis Rs. Debit Entry in RG23A Part II 1. December, 1997 1,086.00 1258 dated 31.03.1998 2. January, 1998 2,226.00 215 dated 18.05.1998 3. February, 1998 1,600.00 386 dated 24.06.1998 4. ....
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....eized by U.P. Financial Corporation and further report called for from the Deputy Commissioner/Range Officers, it was replied that they are unable to verify the same because the concerned records which are more than 10 years old, were not available in the Divisional/Range Office. Accordingly, it was held that the appellant have failed to substantiate the correctness of the amount mentioned in the application and had also failed to produce the relevant records, even on demand by the Central Excise Department. With these observations, the application was held not maintainable and hence, rejected. 5. Being aggrieved, the appellant is before this Tribunal. 6. The learned Counsel, Shri Abhishek Jaju, appearing for the appellant, submitted that the amendment brought by Section 69 of the Finance Act 2010, giving retrospective effect and as such the demand raised earlier by the Department is no longer tenable under the provisions of the Finance Act 2010 read with the provisions of Central Excise Rules 1944 read with Article 165 of the Constitution of India. He further urges that the substantive law having been changed the very basis of issue of show cause dated 23/9/98 ha....