Rule 57-S credit cannot be used for duty and penalty pre-deposit through RG 23C Part II.

Credit under Rule 57-S for capital goods could be used only for the limited purposes permitted by the rule, namely payment of duty on final products, waste, or the capital goods themselves. A pre-deposit of duty and penalty did not fall within those authorised uses, so it could not be discharged by debit entry in RG 23C Part II. The permissible modes for such deposit were TR 6 Challan, PLA, or RG 23A Part II. The objection to using RG 23C Part II credit for pre-deposit was therefore rejected.

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Issues: Whether the pre-deposit of duty and penalty could be made by debit entry in RG 23C Part II under Rule 57-S.

Analysis: Credit allowed in respect of capital goods could be utilised only for the purposes permitted by Rule 57-S. Sub-rule (3) prohibited utilisation of the credit except as provided in sub-rule (2), and sub-rule (2) allowed utilisation only towards payment of duty on final products, waste, or the capital goods themselves. A pre-deposit of duty and penalty did not fall within those permitted uses. The permissible modes for such deposit were TR 6 Challan, PLA, or RG 23A Part II.

Conclusion: The pre-deposit could not be made through RG 23C Part II credit and the objection was rejected.

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