Modvat credit restoration follows PLA payment of confirmed duty, allowing equivalent credit to be reused in accordance with law.

Where confirmed duty is paid through the PLA, the corresponding Modvat credit in RG 23A Part-II may be restored for subsequent utilisation in accordance with law. The Tribunal followed earlier decisions permitting duty payment through the PLA with consequential restoration of equivalent credit, and accepted the assessee's request on that basis. The operative effect was that payment by PLA did not prevent the assessee from recovering the corresponding credit in the prescribed account for future use.

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Issues: Whether the appellants, upon depositing the confirmed duty amount through their PLA, were entitled to restoration of the corresponding credit in RG 23A Part-II for subsequent use.

Analysis: The demand had been confirmed under Rule 57-I, and the appellants proposed to satisfy the amount through the PLA while seeking restoration of the equivalent credit in RG 23A Part-II. The Tribunal noted that similar relief had been granted in earlier decisions where duty paid through PLA was directed to be restored as credit for use in accordance with law. Applying that approach, the Tribunal accepted the request for payment through PLA and restoration of credit.

Conclusion: The request for depositing the amount through PLA and for restoration of the corresponding credit in RG 23A Part-II was allowed in favour of the assessee.

Final Conclusion: The appeal was resolved by permitting the duty payment mechanism sought by the appellants and by directing consequential credit restoration.

Ratio Decidendi: Where the confirmed duty amount is paid through PLA, the corresponding Modvat credit may be restored in the assessee's credit account for subsequent utilisation in accordance with law.

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