Full Judgment
Purporting to act in pursuance of that order, the party reversed credit of the aforesaid amount in their Modvat account viz. RG 23A Part-II.When the matter came up before the Bench for report of compliance, the Bench did not accept the reversal of credit in the Modvat account as proper compliance with the aforesaid order under Section 35F. The Bench, therefore, dismissed the appeal for non-compliance with Section 35F vide Final Order No. A/765/95-NB, dated 22-9-1995. On 23-1-1996, the appellants filed a letter with this Tribunal informing that they had debited an amount of Rs. 28,287/- in their PLA so as to comply with the earlier order for pre-deposit of the amount under Section 35F. By that time, they had also filed an application for restoration of the appeal. That application was disposed of by the Bench as per Misc.
Order dated 25-3-1996, whereby the Bench, in view of the consistent practice of the Tribunal, accepted the assessee's reversal of credit in RG 23A, Part-II as due compliance with Section 35F, recalled the above final order dated 22-9-1995 and ordered restoration of the appeal. That Appeal No. E/1055/95-NB is pending since then. It appears from the record that the cause of action for the present appeal has arisen from the appellant's own conduct of having taken re-credit of the reversed credit of Rs. 28,287/- in the RG 23A Part-II pending Appeal No.1055/95. Such re-credit was taken on 2-7-1996 without prior intimation to the proper officer of the department, nor with the leave of this Tribunal in Appeal No. E/1055/95-NB. The department, by show cause notice, challenged the action of the assessee and asked them to reverse the credit. The departmental action was resisted by the party. The jurisdictional Asstt. Commissioner, in adjudication of the dispute, confirmed the demand of Rs. 28,287/- and directed payment thereof with interest and also imposed a penalty of Rs. 250/- on the assessee. The appeal preferred by the party against the order of adjudication was rejected by the Commissioner (Appeals). Hence the present appeal.
2. Ld. Advocate, Shri Nand Kishore for the appellants, reiterates the grounds of the appeal and submits that there has been double payment of duty, one by way of reversal in RG 23A Part-II and the other by way of debit in PLA. He submits that the appellants are entitled to get back one of the two. Ld. Counsel submits that both the payments had been made in pursuance of interim directions of this Tribunal. The PLA debit could be maintained for purposes of Section 35F in Appeal No. 1055/95 and the Modvat re-credit in RG 23A Part-II be approved in the present appeal. Counsel submits that, in the facts and circumstances of the case, it is only just and proper that the impugned proceedings of the department for recovery of the Modvat credit be set aside.
3. Ld. SDR, Shri S.C. Pushkarna opposes the above prayer on the strength of the findings of the adjudicating and first appellate authorities.
The basic facts are not in dispute. The Appeal No. E/1055/95-B isstill pending. As long as that appeal is pending, a deposit therein under Section 35F shall remain. The short question that arises for consideration is whether it is the deposit effected by way of reversal in the Modvat account or the one effected by debit in the PLA that should so remain in terms of Section 35F in that appeal.
5. That appeal happened to be dismissed for non-compliance with the Tribunal's direction for pre-deposit under Section 35F. While so dismissing the appeal, the Bench took note of the reversal of the amount of Rs. 28,287/- effected by the assessee in their Modvat account, and held that such reversal was not proper compliance with the requirement of Section 35F. Ld. Counsel has submitted today that the Bench subsequently directed the appellants to make pre-deposit by way of debit in PLA and it was pursuant to such direction that the party debited the amount in their PLA. Counsel, however, has not been able to substantiate the submission. Even if it is assumed that there was such a direction from the Bench, the question still remains as to whether ultimately the PLA debit was accepted by the Bench as due compliance with Section 35F. I have examined this question and I find myself constrained to answer it in the negative because, by order dated 25-3-1996, the Bench, in Appeal No. E/1055/95, entertained the party's plea that the reversal of credit in RG 23A, Part-II be accepted to be due compliance with Section 35F and it accepted the plea following the Tribunal's precedent in like matters. Any previous interim order whatsoever passed by the Bench under Section 35F stood modified by the order dated 25-3-1996 insofar as the nature of pre-deposit under Section 35F was concerned. The final position is that, in Appeal No.E/1055/95-B, the reversal of Rs. 28,287/- in RG 23A Part-II stands recognized and accepted as due and proper compliance with Section 35F and the same should remain as such during the pendency of that appeal.
The appellant's act of taking re-credit of the amount in the Modvat account pending the above appeal is not only unauthorised as rightly found by the authorities below but also appears to be in the nature of abuse of the process of this Tribunal. They have got to undo the mischief. The departmental proceedings to compel them to set things right are under challenge in the present appeal and the same will be sustained.
6. In view of the findings recorded above, this appeal is held to be without bona fides or merit on the substantive issue. However, having regard to the facts and circumstances of this case, I find no valid reason for imposing any penalty on the assessee. Further, as rightly pointed out by the Counsel, the order for levy of interest is also not sustainable as there was no provision of law at the material time authorising such levy. Therefore, the order for interest and penalty is set aside. Barring this, the impugned order is upheld. As regards the PLA debit, which is extraneous to Appeal No. 1055/95, the appellants are at liberty to take recourse to the remedy available in law.
7. The appeal is disposed of in the above terms. Registry shall place a certified copy of this order in the file of Appeal No. E/1055/95-NB also.