- (1.) This is an application under sub-section (1) of Section 35H of the Central Excise Act with a request that the High Court may direct the Appellate Tribunal to refer to the High Court the question of law referred to in Para 8 of the application. It arises out of appeal No. E/2628/02-NB/SM decided by the North Regional Bench of Customs, Excise and Service Tax Appellate Tribunal, New Delhi dated 13th of June, 2003. In the application the following questions of law have been sought to be raised :- (i) Whether the Hon'ble Tribunal was justified in denying a part of Modvat credit taken after expiry of six months when the major part of the Modvat credit due was taken within the period of six months as contemplated under the Rules? (ii)Whether the Hon'ble Tribunal was justified to deny a part of the Modvat credit inadvertently not taken by the applicant in terms of Rule 57G(5) of the Central Excise Rules, 1944 when the major part of Modvat credit due was taken within six months of the date of issue of the duty paying documents? (iii) Whether the Hon'ble Tribunal was justified in holding that the instant case was covered by the decision of Larger Bench in Kusum Ingots and Alloys Ltd. as well as that of the Apex Court in Osram Surya (P) Ltd. , when in the instant cases the entire Modvat credit due was taken after the expiry of six months from the date of issue of duty paying documents. Whereas in the instant case 95% of the Modvat credit due was taken within the prescribed period and it was only 5% of the Modvat credit was was taken after the expiry of six months? (iv) Whether the Hon'ble Tribunal was justified in confirming the demand of Rs. 1,15,405.00 taken as Modvat credit and penalty of Rs. 25,000.00 when the Modvat credit was due to the applicant in all respects?
(2.) However, the proposed question No.1 is comprehensive enough and it comprises all the other questions of law sought to be raised herein.
(3.) The facts of the case are not much in dispute and may be noticed in brief to understand the controversy. The applicants are registered with the Central Excise Department and are engaged in manufacture of steel products falling under Chapter 72 of the Central Excise Tariff Act, 1985. They were availing the facility of Modvat Scheme and were availing the credit of duty paid, both on inputs as well as capital goods in accordance with the procedure prescribed under the relevant Rules. They were entitled to claim Modvat credit up to 95%, prior to the period March, 1999. The Parliament in the Budget 1999 removed the restriction to entitlement of Modvat from 95% to 100%. In other words, the applicants were entitled to Modvat credit admissibility to the extent of 100% of the input cost. The applicants, however, continued to avail the Modvat credit on inputs up to 95% of the duty paid on input cost, notwithstanding the removal of 95% restriction by the Budget of the year 1999. In March, 1999, the applicant had taken 95% of the total duty paid on inputs whereas they could have taken 100% of the total duty paid on inputs. For the first time, in January, 2000 the applicant claimed the balance 5% credit. The differential credit of Modvat was taken on 13 of January, 2000 which was not allowed by the adjudicating authority and the said order has been confirmed by the First Appellate Authority and the Customs, Excise and Service Tax Tribunal as well.;