CEA No.5 of 2004 4.8.2009 Present: Mr. Sandeep Sharma, Assistant Solicitor General of India, for the appellant. Mr. B.C. Negi, counsel for the respondent. This is an appeal under Section 35-G of the Central Excise Act, 1944 ( for short Act) against the order dated 12.7.2004 passed by Customs, Excise and Service Tax Appellate Tribunal, West Block-II R.K. Puram, New Delhi in Appeal No.E/3222/03-NB(S)( for short Tribunal). 2. The facts in brief are that the respondent was engaged in the manufacture of Sewing Thread and yarn of Synthetic Staple Fibre, falling under chapter sub heading 55.08 and 55.09 respectively of the schedule to the Central Excise Tariff Act, 1985. It has been alleged that respondent took CENVAT Credit of additional duty of customs of Rs.84,074/- as Additional Excise Duty ( AED) and Textiles & Textile Articles ( TTA). This amount was paid by way of debit under Duty Entitlement Pass Book Scheme(DEPB) by availing exemption under Notification No.34/97-Cus dated 7.4.97. It was alleged that CENVAT Credit of additional duty of customs was not admissible as it was not paid in cash but was adjusted by way of debit under the DEPB Scheme. The Adjudicating Authority vide order dated 31.12.2002 confirmed the demand of Rs.84,074/- and also imposed penalty under Section 11(AC) of the Act. Interest has also been demanded under Section 11(AB) of the Act. 2 2 3. The respondent had filed an appeal against the order of the Adjudicating Authority before Commissioner (appeals), which was allowed on 17.7.2003. The department filed appeal against the order dated 17.7.2003 before Tribunal which was dismissed on 12.7.2004. The Revenue has filed the appeal under Section 35-G of the Act which has been admitted on the following substantial question of law:- “Whether the duty debit made in Duty Entitlement Pass Book in respect of countervailing duty, can be allowed as Modvat/CENVAT contrary to the provisions of Exim policy and Notification No.34/97 Cus. Dated 9.04.97 or provision of Rule 3 of CENVAT Credit Rule 2002” 4. Heard. Mr. Sandeep Sharma, learned Assistant Solicitor General of India, for the appellant has submitted that the Tribunal has not gone into the question involved in the case. The Tribunal has relied Polyhose India Pvt. Ltd. vs. Commissioner of Central Excise 2003 (152) ELT 361 which was followed by the Commissioner (Appeals). It has been submitted by Mr. Sandeep Sharma that Polyhose India Pvt. Ltd is no good law in light of Larger Bench decision of Tribunal in M/s. Essar Steels Ltd. vs. CCE Vishakhapatnam, [Final Order No.945/04-NBA dated 16.8.2004]. He has also submitted that the Tribunal has not even given a finding that the present case is covered by Polyhose India Pvt. Ltd case. The Tribunal has dismissed the appeal simply on the ground that the revenue has not produced any order staying the order of the earlier decision. A submission has been made 3 3 that in view of non-consideration of the case by the Tribunal the case be remitted to the Tribunal for deciding the appeal afresh in accordance with law. Mr. B.C. Negi, learned counsel appearing on behalf of the respondent has submitted that there is nothing wrong in the order dated 12.7.2004 of the Tribunal when the Tribunal has followed Polyhose India Pvt. Ltd case. 5. We have gone through the impugned order. The Tribunal has not recorded a finding that the present case is covered by Polyhose India Pvt. Ltd. The learned counsel for the appellant has submitted that Polyhose India Pvt. Ltd is no good law in light of Larger Bench decision of the Tribunal in M/s. Essar Steels Ltd. vs. CCE Vishakhapatnam. The Tribunal has dismissed the appeal of the revenue only on the ground that department had failed to produce copy of order staying the operation of earlier decision of the Tribunal. The Tribunal was required to consider the facts of the case and then to see whether case is covered by Polyhose India Pvt. Ltd. In the facts and circumstances of the case, we accept the contention of learned counsel for the appellant that the Tribunal should reconsider the matter and therefore, we are not deciding the aforesaid substantial question of law. 6. No other point was urged. 7. In view of above discussion, appeal is allowed and order dated 12.7.2004 passed by Customs, Excise and Service Tax Appellate Tribunal, West Block-II R.K. Puram, New Delhi in 4 4 Appeal No.E/3222/03-NB(S) is set aside. The case is remitted to the Tribunal with the direction to decide the appeal afresh in accordance with law. ( R.B. Misra), J ( Kuldip Singh) J. August 4, 2009 (sks) 5 5