Paras Industries Vs. Commissioner of Central Excise and

Paras Industries vs Commissioner of Central Excise and

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Mar 05, 2001

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Citation: sooperkanoon.com/21239
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On: Mar 05, 2001
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Paras Industries

Respondent

Commissioner of Central Excise and

Excerpt

.....did not require payment.2. in august 1998, the department issued notice to the appellant demanding duty on goods cleared between 16.3.95 and 8.2.98. the notice invoked the extended period contained in the proviso under sub-section (1) of section 11a of the act. adjudication on the notice, the commissioner accepted the plea of the manufacturer that the extended period of limitation would not apply, and limited the demand to six months from the date of notice. he held the duty for this period to be payable and imposed a penalty on appellant of rs.25,000/-. hence this appeal.3. the contention of the counsel for the appellant is that benefit of modvat credit of the duty paid on the goods used in the manufacture of yarn must be available to it, and that abatement from the sale price of the duty in order to amive at the assessable value under section 114a(1) of the act must be permitted. although both these contentions have been urged before the commissioner, he has not dealt with them.4. if the duty has been demanded on the sale price of the goods, the appellant could rightly claim the deduction of duty freight incurred arrived at section (4) of the act in which duty is to be paid. if the appellant was under the bona fide belief that the goods were exempted, its case would be covered by various decisions of the tribunal which have held that such a manufacturer would be entitled to the modvat credit of the duty paid if it can show that it had paid duty on the inputs received by it. we think it appropriate that this aspect and the other aspect of department of assessable value be determined by the commissioner.5. the appeal is accordingly allowed. while the order of the commissioner holding the duty payable for six months is confirmed, the matter is remanded to him for redetermination of duty in the light of the submissions before us and consequently to determine fine and penalty.

Full Judgment

1. Appeal is taken up for disposal after waiving deposit. The appellant was engaged in the manufacture of metallic yern. The yarn was exempted by notification 26/94 until 16.3.95. On this date, the exemption was withdrawn by resigning the notification. The appellant continued to clear the goods without payment of duty, apparently on the view that some instruction by the Board did not require payment.

2. In August 1998, the department issued notice to the appellant demanding duty on goods cleared between 16.3.95 and 8.2.98. The notice invoked the extended period contained in the proviso under sub-section (1) of section 11A of the Act. Adjudication on the notice, the Commissioner accepted the plea of the manufacturer that the extended period of limitation would not apply, and limited the demand to six months from the date of notice. He held the duty for this period to be payable and imposed a penalty on appellant of Rs.25,000/-. Hence this appeal.

3. The contention of the counsel for the appellant is that benefit of modvat credit of the duty paid on the goods used in the manufacture of yarn must be available to it, and that abatement from the sale price of the duty in order to amive at the assessable value under Section 114A(1) of the Act must be permitted. Although both these contentions have been urged before the Commissioner, he has not dealt with them.

4. If the duty has been demanded on the sale price of the goods, the appellant could rightly claim the deduction of duty freight incurred arrived at section (4) of the Act in which duty is to be paid. If the appellant was under the bona fide belief that the goods were exempted, its case would be covered by various decisions of the Tribunal which have held that such a manufacturer would be entitled to the modvat credit of the duty paid if it can show that it had paid duty on the inputs received by it. We think it appropriate that this aspect and the other aspect of department of assessable value be determined by the Commissioner.

5. The appeal is accordingly allowed. While the order of the Commissioner holding the duty payable for six months is confirmed, the matter is remanded to him for redetermination of duty in the light of the submissions before us and consequently to determine fine and penalty.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Paras Industries vs Commissioner of Central Excise and Same Subject Excise