1992 (4) TMI 124 - AT - Central Excise

Tribunal applies Rule 57E post-1987 amendment for duty credit adjustment. Remand for fresh decision on cash refund claim.

The Tribunal held that Rule 57E was applicable post-amendment in 1987, allowing for adjustment in duty credit. The case was remanded to the Assistant ... MODVAT Credit Issues:Claim for cash refund under Rule 57E - Applicability of Rule 57E for adjustment in duty credit - Interpretation of Rule 57E post-amendment - Eligibility for cash refund under Rule 57E - Decision on refund claim by Assistant CollectorAnalysis:The case involves two appeals against the Collector (Appeal)'s order, where the appellants, manufacturers of welding electrodes, sought a refund of duty paid on inputs under the Modvat scheme. The inputs were initially received at a nil rate of duty under an exemption notification. The appellants claimed the refund based on Rule 57E, which allows for adjustment of credit in RG 23A Part II. The Assistant Collector rejected the refund claim, stating that no credit could be taken as the duty on the inputs was paid by the supplier, not the appellants.The Collector (Appeal) allowed the appeals, permitting the appellants to avail Modvat credit on duty paid subsequently on the inputs. However, the appellants appealed against the decision, seeking a cash refund under Rule 57E due to the transfer of factories. The main issue was whether adjustment in duty credit was permissible under Rule 57E post-amendment in 1987. The appellants argued that the amendment allowed for such adjustment, citing statutory interpretation principles.The Respondent opposed the cash refund, arguing that deliberate clearance under exemption precluded credit against the gate passes. They contended that Rule 57E required entries in RG 23A for credit variation, which was not possible in this case. After hearing both sides, the Tribunal found that Rule 57E applied to the case as the refund claim was made after the amendment. The Tribunal referenced a previous case to support the principle of applying laws prevailing at the time of claim.The Tribunal held that Rule 57E was applicable and remanded the case to the Assistant Collector for a fresh decision on the refund claim in accordance with the law. The eligibility for cash refund was left to be determined based on the alternatives specified in Rule 57E and the admissibility under the law. The appeal was disposed of with these observations.