TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1166
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.... Rs. 11064 taken on HVLP system is held as not admissible. Annexure-II The demand has to be confined to Rs. 3,00,965/- in as much as only to this extent Modvated inputs have been used in the manufacture of exempted products. Annexure-III - A sum of Rs. 3,59,668/- being duty credit taken in 20428.378 Kgs. of coils of the sizes 0.5 mm 0.4 mm and 0.63 mm used in dutiable products need not be reversed, but a sum of Rs. 8,01,644/- is to be reversed. Annexure-IV - A sum of Rs. 11,17,500/- is demandable on account of usage of dies during the period 1/3/1994 to 16/3/1995 when there was no exemption on such capital goods." 2. On appeal, the Tribunal vide Final Order No.853 & 854/2008 dt. 11.8.2006 dismissed the appeal however, reduced penalty to Rs.1,00,000/-. Against the said final order, the appellant preferred C.M.A. No.180/2007 before the Hon'ble High Court of Madras. The High Court vide their judgment dt. 06.11.2014 remanded the matter back to the Tribunal for de novo consideration on the legal pleas raised by the appellant. Hence the matter is once again before this forum. 3. On 09.08.2017, when the matter came up for hearing, appellant was not represented, although notice of ....
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....scheme is to remove the cascading effect of duty on the finished goods. Appellants have in fact suffered on two counts. Credit which was available for use of inputs in the dutiable product were not taken and credit availed on inputs used in the manufacture of goods meant for export were disallowed. The confirmation of demand has resulted in penalizing the appellants twice. Taking into consideration the purpose and intention of the Act and the bonafides of the appellants the learned authority ought to have extended the benefit of MODVAT credit. (d) As far as the duty demand in respect of exemption claimed for tools and dyes is concerned, the assessee raised a plea in paragraph (5) of the grounds of appeal before the Tribunal as follows : "5. The appellants submit that exemption notification No.67/95, dated 16.3.1997 is clarificatory in nature and therefore retrospective in operation. In the circumstances no duty is leviable on tools and dies. Order confirming the demand is therefore bad in law. (e) Even in respect of limitation, despite a specific plea taken in paragraph (6) of the appeal grounds the Tribunal has simply rejected the same saying that the plea has not been substan....
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....e of or considered by the adjudicating authority. It is also not the case that appellant has been able to disprove ineligibility of the remaining amount of Rs. 8,01,644/-, or for that matter, produce evidence to prove that they have not used corresponding quantity of inputs and exempted product, even at this stage of appeal. In the circumstances, we are of the considered opinion that the order of the adjudicating authority demanding reversal of credit of the extent of Rs. 8,01,644/- is correct. 5.2 (b) Whether the demand of duty of Rs. 11,17,500/- relatable to Annexure-IV with regard to the claim that there was no exemption in respect of tools and dyes which were manufactured and consumed in the factory during the period from 1.3.1994 to 15.3.1995 is correct ? It is not in dispute that assessee had developed various moulds/dies during 1.4.1994 to 31.3.1995 totally valued at Rs. 480.70 lakhs, out of which some of them were developed for cookware / restaurant items and remaining developed for vacuum flask. The allegation in the SCN is that assessee has not paid appropriate Central Excise duty on such dies, although in their Profit and Loss Account for the period ending 31.12.1994,....
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....or use of inputs in the dutiable product were not taken and credit availed on inputs used in the manufacture of goods meant for export were disallowed. The confirmation of demand has resulted in penalizing the appellants twice. Taking into consideration the purpose and intention of the Act and the bonafides of the appellants the learned authority ought to have extended the benefit of MODVAT credit. Unless otherwise specified, only when final products are dutiable, credit can be allowed. Even when final products are exported, as correctly observed by the lower authority, credit involved on such exports is either allowed to be used for payment of duty on goods cleared for home consumption and if this is not possible, a cash refund is sanctioned . But if the final goods are exempted the question of availing any input credit does not arise even if the goods are exported. There are other export promotion schemes made available by the legislature e.g. drawback, where the cascading effect of duty on finished goods is sought to be neutralized or mitigated. We note the protestations of the assessee that where the purpose and intention of the Government was to prevent cascading effect and t....
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....ble on record, that department had taken figures from balance sheet which is a statutory document and hence the adjudicating authority erred in confirming the demand under extended period of limitation. 5.6 However, we find that right from the show cause notice itself the grounds for invocation of extended period of limitation has been brought out in detail. In respect of the issue on utilization of capital goods/modvat inputs in the manufacture of non-stick cookware items (relating to Annexure-I), the notice makes mention of the fact that assessee had misdeclared to department in Rule 57I declaration as well as under Rule 57G that said items will be used in manufacture of pressure cook ware and vacuum flasks although they were in fact using for manufacture of non-stick cookware / restaurant items. 5.7 In respect of the dispute on modvat credit on 0.40mm,0.50 mm and 0.63 mm SS coils, the SCN has alleged in page 12 therein, that though assessee had shown to the department that they were only using non-modvat products inputs for manufacture of exempted items, in reality, they had used the said modvatted inputs only hence misstated vital facts to the department. We find that these ....