Neon Laboratories Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

this is an application for stay of collection of duty of rs. 7,74,332 and the penalty of rs. 75,000. the question involved is about claiming of the modvat in respect of the inputs procured from 100% eou (e.o.unit). the appellate authority and the adjudicating authority had held credit is on the basis of duty is paid by the eou. which should be the basis of calculation in respect of modvat in terms of section 12 of the customs act? this is because the supplier of the raw material was an eou. the matter is not res integra. larger bench decision in the case of vikram lspat v. commissioner of central excise mumbai 2000 (20) elt 800 (tribunal-lb) has been given in favour of the assessee where the tribunal upheld the order passed by the tribunal in its second judgment in the case of commissioner v. weston electronics ltd. 1997 (95) elt 624. in view thereof there is a strong prima facie case in favour of the appellants. i therefore waive payment of the duty and penalty imposed and stay the recovery thereof during the pendency of the appeal.

Judgment:

This is an application for stay of collection of duty of Rs. 7,74,332 and the penalty of Rs. 75,000. The question involved is about claiming of the modvat in respect of the inputs procured from 100% EOU (E.O.unit). The appellate authority and the adjudicating authority had held credit is on the basis of duty is paid by the EOU. Which should be the basis of calculation in respect of Modvat in terms of Section 12 of the Customs Act? This is because the supplier of the raw material was an EOU. The matter is not res integra. Larger Bench decision in the case of Vikram lspat v. Commissioner of Central Excise Mumbai 2000 (20) ELT 800 (Tribunal-LB) has been given in favour of the assessee where the Tribunal upheld the order passed by the Tribunal in its second judgment in the case of Commissioner v. Weston Electronics Ltd. 1997 (95) ELT 624. In view thereof there is a strong prima facie case in favour of the appellants. I therefore waive payment of the duty and penalty imposed and stay the recovery thereof during the pendency of the appeal.