Customs, Excise and Gold Tribunal - Mumbai
Milton Polyplas (I) Pvt. Ltd. vs The Commissioner Of Central Excise on 5 May, 2004
ORDER K.D. Mankar, Member (T)
1. The stay application is directed against the impugned order-in-appeal, whereby the, Commissioner (Appeals) has upheld the order of the Deputy Commissioner, confirming the demand of Rs. 24,40,837/- and imposition of penalty of Rs. 15 lakhs. The application seeks waiver of pre-deposit of duty and penalty. The Commissioner (Appeals) has rejected the appeal of the appellants for their failure to make pre-deposit of the aforesaid amount without examining the merits.
2. We note that the show cause notice was issued to seek recovery of duty on "insulated wares" cleared by the appellants with effect from 01/03/92 to 30/04/92. In terms of Notification No. 14/92-CE dated 01/03/92, these goods were chargeable to duty at an appropriate rate with effect from 01/03/92 and were exempted with effect from 30/04/92 vide Notification No. 59/92-CE dated 30/04/92. These goods were also exempted from duty prior to 01/03/92. It is alleged in the show cause notice that, during the period from 01/03/92 to 30/04/92, the appellants manufactured and cleared the said goods by paying excise duty totalling to Rs. 24,96,686.78 by debiting the entire amount through RG-23A Part-11. It is claimed that on verification, it was found that the duty payable on the raw materials contained in the finished goods in stock as on 01/03/92, was Rs. 55,850.18. As against this, the appellants had debited a duty of Rs. 24,96,686.78 through RG 23A Part-11. Thus, it is claimed by the department that, there was an excess availment of credit to the tune of Rs. 24,40,836.60.
3. The appellants had denied that they had furnished any information to the department regarding the extent of credit of inputs contained in the furnished goods. The department had failed to furnish the information on the basis of which the demand was worked out. It has further been claimed that the credit that has been debited through RG-23A Part-II, which refers not only to the credit of duty paid on inputs contained in the finished products lying in stock, but also, refers to the inputs received during the period from 01/03/92 to 30/04/92.
4. We have examined the submissions made by the appellants and also heard both sides. It is noted by us, that the allegation refers to the utilisation of certain amount of modvat credit for discharge of duty payable on "insulated wares" cleared during the period from 01/03/92 to 30/04/92. It is not impossible for departmental authorities to locate the source of credit entries made in the RG-23A Part-II register with reference to the corresponding entries of receipt of raw materials reflected in RG-23A Part-I register. The order-in-original does not disclose any particulars as to how the conclusion has been drawn to the effect that the appellants had utilised the excess credit of Rs. 24,40,836.60, The show cause notice also does not disclose as to how the excess has occurred. It appears that the credit accrued in respect of duty paid inputs contained in the finished goods in stock as on 01/03/92 has been worked out at Rs. 55,850.18. The build up of credit on account of subsequent receipt of duty paid input would also be documented in the respective records. There is no finding in the order of the adjudicating authority on the submissions that the credit availed also relates to the receipt of duty paid material during the relevant period. The impugned order of the Assistant Commissioner therefore cannot be justified. The Commissioner (Appeals) has not examined this aspect and dismissed the appeal on failure to make pre-deposit.
5. We accordingly feel that the appellants had made a strong prima facie case on merits to waive the pre-deposit of the entire amount of duty and penalty as ordered thereunder. Accordingly, we waive the pre-deposit of entire amount of duty and penalty and allow the stay application. Since the Commissioner (Appeals) had not examined the merits, we take the appeal itself for final disposal. We set aside the impugned order passed by the Commissioner (Appeals) and allow the appeal by way of denovo remand. The Commissioner (Appeals) is directed to decide the appeal on merits, after waiving the pre-deposit, within three months from the date of this order after following the principles of natural justice.
(Operative part pronounced in Court)