J.C.T. ELECTRONICS LTD. Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. J.C.T. Electronics Ltd., is whether they are eligible to take back the Modvat credit in their books of account after the matter has been remanded by the Commissioner (Appeals) to the Adjudicating Authority for re -adjudication.

(2.) Shri R. Santhanam, learned Advocate, submitted that the Appellants, manufacturer of colour picture tubes, avail of Modvat Credit of the duty paid on the inputs and capital goods used in or in relation to the manufacture of the colour picture tubes (CPTs); that a show cause notice dated 3.7.1997 was issued to them for denial of Modvat Credit on capital goods for the period from December 1996 to February 1997; that the Assistant Commissioner under Order -in -Original No. 214/98 dated 18.5.98 disallowed the Modvat Credit amounting to Rs. 1,52,68,140 which was reversed by them under protest on 20.5,98; that the Commissioner (Appeals) vide Order -in -Appeal No. 123/99 dated 1.4.999 allowed Credit of Rs. 1,40,53,140 to them and remanded the matter to the Assistant Commissioner for de novo adjudication in respect of the balance Rs. 12,15,100; that the Appellants informed the Assistant Commissioner to take up the de novo Adjudication under their letter dated 24.5.99; that thereafter on 14.6.99 they took the Credit of Rs. 1,40,53,140 in their RG 23 -C Part II being the amount allowed by the Commissioner (Appeals) under intimation to the Assistant Commissioner under their letter dated 14.6.99; that the Deputy Commissioner, under Order -in -original No. 34/2000 dated 28.8.2000, ordered that the amount of Credit so taken pursuant to the Order -in -Appeal dated 1.4.99, be recovered from them and imposed a penalty of Rs. 25 lakhs on the ground that an appeal had been filed by the Department against the said Order -in -Appeal and the de novo adjudication had been kept pending and that there is a set procedure for claiming the refund of the Credit allowed and that the entire Order -in -original dated 18.5.98 was remanded for de novo adjudication; that on appeal filed by them, the Commissioner (Appeals), under the impugned Order, upheld the Order -in -original while setting aside the penalty holding that Order -in -original dated 18.5.98 was set aside and the case was remanded for de novo adjudication and the appellant ought to have deferred from taking re -credit till the order of the Adjudicating Authority.

(3.) The learned Advocate, further, submitted that a demand which has been set aside and quashed by the Commissioner (Appeals) and the adjudication order being remanded for de novo adjudication, either wholly or partly, the demand raised earlier has been wiped out and for a non -existing demand, there can be no action for collection or recovery; that when once the amount of Modvat Credit was debited by them pursuant to the Adjudication order dated 18.5.98 and the said Order being set aside in appeal, they had become entitled to take re -credit thereof. He relied upon the decision in the case of Bharat Foam Udyog Ltd. v. CCE, 2001 (44) RLT 613 (CEGAT) wherein it has been held by the Tribunal that "where the deposit was made by making endorsement in the PLA, the assessee himself could have taken credit of the amount by making necessary endorsement in his own PLA account" once the order was set aside by the Tribunal. Reliance has also been placed on the decision in the case of Ambica Hydraulics (P) Ltd. v. CCE, Ahmedabad -II, 2003 (58) RLT 769 (CEGAT) wherein it has been held that "Credit of the pre -deposit amount after the passing of the Order in favour of the assessee by the appellate authority in their PLA can be taken without filing the refund application. He also referred to the following decisions: