1996 (6) TMI 165 - AT - Central Excise

Tribunal allows partial appeal on Modvat credit refund claims under Rule 191BB

The Tribunal allowed the appeal in part, holding that the refund claims related to Modvat credit under Rule 191BB and Notification No. 33/90 were valid. ... Modvat - Inputs Issues:The judgment involves the rejection of refund claims by M/s. J.K. Synthetics Limited related to Modvat credit under Rule 191BB of Central Excise Rules and Notification No. 33/90, as well as the demand of duty for short reversal of Modvat credit and non-coverage of inputs by the Gate Pass.Refund Claims under Rule 191BB and Notification No. 33/90:The appeals were filed against the rejection of refund claims by the Assistant Collector and upheld by the Collector (Appeals). The appellants claimed refund of amounts reversed in their RG-23A Part II account of Modvat credit for inputs used in the manufacture of Acrylic Fibre/Tow removed without payment of Central Excise duty. The Tribunal referred to previous decisions and held that the credit taken by the appellants was not liable to be reversed under Rule 57C. The Tribunal also addressed the issue of time limitation for claiming Modvat credit, emphasizing that Section 11B of the Central Excises and Salt Act does not apply to refund claims of reversed Modvat credit.Short Availment of Credit under Modvat Scheme:The Tribunal cited a Gujarat High Court decision regarding short availment of credit under the Modvat Scheme, stating that the limitation under Section 11B applies to claims for differential credit. The Tribunal differentiated the present case from cases of short-taken credit, as the appellants had erroneously reversed the credit amounts. The Tribunal upheld the part of the order holding the refund claim time-barred for a specific amount but allowed the appeal for the balance amount to be recredited to the appellants' account.Demand of Duty and Gate Pass Issue:In another appeal, the Tribunal addressed a demand of duty and rejection of a refund claim. The Tribunal held that Rule 57C was not applicable, thus the demanded amount related to short debited credit was not due. However, an amount related to inputs received against a Gate Pass with multiple endorsements was upheld as not covered due to a broken link between consignees. The Tribunal partly allowed both appeals based on the above findings.