Modvat credit withdrawal effective only on trade notice date, not earlier government order date.

Withdrawal of deemed Modvat credit on M.S. sheets took effect only when the trade was informed through the Collectorate trade notice, not from the earlier date stated in the Government order. The proviso to Rule 57G(2) permitted credit to be granted or withdrawn from a specified date, but the operative date was treated as the date of communication to the trade where such notice was required. Credit could not therefore be disallowed for the period before 3-12-1987, and the disallowance was confined to the period after that date.

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Issues: Whether the withdrawal of the deemed Modvat credit facility on M.S. sheets became operative from the date specified in the Government order or only from the date when the withdrawal was communicated to the trade through the Collectorate trade notice.

Analysis: The dispute turned on the operation of the proviso to Rule 57G(2), under which the Central Government could direct that credit facility be granted or withdrawn from a specified date. The impugned withdrawal order specified 2-11-1987, but the withdrawal was brought to the notice of the trade by Trade Notice No. 66/87 dated 3-12-1987. Applying the earlier Tribunal rulings relied upon in the case, the operative date for withdrawal was treated as the date on which the trade was informed through the Collectorate notice, not the earlier date in the Government order.

Conclusion: The withdrawal of the deemed Modvat credit facility was effective only from 3-12-1987, and credit could not be disallowed for the period prior to that date.

Final Conclusion: The assessee succeeded to the extent that the disallowance of deemed Modvat credit was restricted to the period after 3-12-1987, while the remaining order was maintained.

Ratio Decidendi: Where a withdrawal of credit facility is required to be communicated through a trade notice, its operative effect follows the date of such communication to the trade rather than the earlier internal date mentioned in the withdrawal order.

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