Last Updated on
G.A. Brahmadeva, Member (J)
1. This appeal is filed by the Revenue. The issue relates to Modvat credit. The Assistant Collector as per his order has denied Modvat credit on the ground that these items are not in direct participation in the manufacturing process of the final product. And the procedure with reference to the Modvat credit has not been complied with. The party has filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) has analysed the factual position while allowing the appeal filed by the party and para 5 of the impugned order is relevant and same is as under:
“The facts on record and the submissions made by the appellants at various stages have been carefully considered. There is considerable merit in the submissions made by the appellants that the credit on the items i.e. DG sets and parts there of have been denied by the Adjudicating Officer on grounds which are not alleged in the SCN, and therefore, the order-in-original is liable to be set aside on this ground alone. The fact is that the Adjudicating Officer has not disputed the eligibility of the goods for Modvat credit under rule 57Q which was the ground on which the credit was sought to be denied to the party in the SCN and, as such, the impugned order is liable to be set aside on this ground alone. However, the contention of the appellant that the finding of the Adjudicating Officer that the procedural requirements were not fulfilled are also not sustainable, is also correct. A perusal of provisions of rule 57T does not lend itself to the interpretation that the provisions have been violated. The requirements which, according to the Adjudicating Officer were not met by the appellants are not included under the provisions of rule 57T except for the debit entry of the capital goods in the Central Excise records i.e. RG 23 Part I and which, in any case, is not a matter of dispute. The contention of the appellant is that the procedures under the Customs Act relied on by the Adjudicating Officer to deny credit are irrelevant to the capital goods Modvat scheme according to him, the only requirement is the production of the triplicate copy of the bill of entry and not the duplicate as stated by the adjudicating authority in the order. However, the Adjudicating Officer has not disputed the fact of the relevant copy of the bill of entry having been produced. His finding that there was no endorsement on the reverse of bill of entry regarding its use is not sustainable as the goods were brought in the factory of the appellant itself which is also the importer for use and was not meant for use any where else.”
2. Arguing for the Revenue Shri S.K. Das, JDR submitted that these items are not only used in respect of the finished product in question but the same was utilised even with reference to the other items and accordingly Modvat credit cannot be extended. It was brought to our notice by the respon-dant’s counsel that neither this was the charge in show cause notice nor any findings given by the authorities below on this issue in their respective orders. The department should not be allowed to enlarge the dispute at this stage.
3. We have carefully considered the matter. We find that there is substantial force in the argument advanced on behalf of the respondents that Revenue cannot be permitted at this stage to raise the new plea to enlarge the scope of the dispute. Admittedly the new plea taken by the Department before the Tribunal now, neither was in the show cause notice nor in the respective orders passed by the authorities below. Accordingly, new plea taken by the Revenue is hereby rejected. We find that other issues have been properly analysed by the Commissioner in the impugned order. In view of this position, we do not find any infirmity in the impugned order. In the result, the appeal filed by the Department is hereby dismissed.