Eagle Spring Industries Vs. Collector of C. Ex. - Court Judgment

Excerpt:

.....was, ab initio, not available, the question of time bar should not arise.for this proposition he relies on two judgments reported in (i) 1989 (42) e.l.t. 701 and (ii) 1989 (21) ecr 177 sc.3. we have carefully considered the pleas advanced from both the sides.we are inclined to agree with the learned advocate that they have a strong prima facie case inasmuch as the correct description of the inputs have been made and admitted by the department. on the question of time bar he has a strong case and the citations given by the learned sdr are not quite relevant to the issue under consideration here.accordingly we are inclined to grant unconditional stay and we are ordering so.

Judgment:

1. Shri Willington Christian, the learned advocates for the applicants has urged that the issue involved herein is in a very short compass. He had made an application for availing of MODVAT credit for the correctly described inputs, namely 'leaves for spring' (steel flat). Since he was not sure about the correct classification of the inputs, therefore, on his own understanding he had given the classification under Chapter 73.

However, from some of his suppliers he had been receiving the aforesaid inputs classified under Chapter 72, both at the same rate of duty. The department has demanded duty on the ground that the correct classification of inputs has not been made by the applicant. He has also pointed out that the duty demanded is partly beyond the time of six months inasmuch as the show cause notice was issued on 16-11-1987 for the period from 29-7-1986 to 2-7-1987. He has not pleaded anything on the financial aspect. On the basis of strong prima facie case he urges that unconditional stay to be granted.

2. Countering the argument of the learned advocate, Shri C.P. Arya the learned SDR for the respondent Collector has urged that there is a misdeclaration of the heading of the inputs and therefore the duty is correctly demandable even though he concedes that the description of the goods given by the applicants before the lower authorities was correct while applying for the scheme of MODVAT credit. As regards the plea of time bar the learned SDR points out that since the credit was, ab initio, not available, the question of time bar should not arise.

For this proposition he relies on two judgments reported in (i) 1989 (42) E.L.T. 701 and (ii) 1989 (21) ECR 177 SC.3. We have carefully considered the pleas advanced from both the sides.

We are inclined to agree with the learned advocate that they have a strong prima facie case inasmuch as the correct description of the inputs have been made and admitted by the department. On the question of time bar he has a strong case and the citations given by the learned SDR are not quite relevant to the issue under consideration here.

Accordingly we are inclined to grant unconditional stay and we are ordering so.