1995 (12) TMI 196 - AT - Central Excise

Tribunal Upholds Order on Central Excise Duty Appeal, Emphasizes Modvat Credit Utilization

COLLR. OF C. EX., CALCUTTA-I Versus BLACK DIAMOND BEVERAGE (P) LTD.

COLLR. OF C. EX., CALCUTTA-I Versus BLACK DIAMOND BEVERAGE (P) LTD. - 1998 (101) E.L.T. 48 (Tribunal) Issues:1. Appeal against the Order passed by Collector (Appeals) regarding Central Excise duty on inputs.2. Allegation of not fully accounting for inputs under Central Excise Rules.3. Withdrawal of Modvat credit on Aerated Water and unutilized inputs.4. Interpretation of Modvat Rules and correlation between inputs and final products.5. Applicability of time limitation under Rule 57(I)(2).6. Recovery of Modvat credit and utilization of inputs post-withdrawal.Analysis:1. The appeal was filed against the Order passed by Collector (Appeals) concerning the demand of Central Excise duty on inputs lying in stock as on a specific date. The Assistant Collector confirmed the demand, which was set aside by the Collector (Appeals), leading to the appeal by the appellant Collector.2. The Department issued a show cause notice alleging non-accounting of inputs disposed of as per Central Excise Rules. It was claimed that Modvat credit on Aerated Water was withdrawn, and unutilized inputs were found in stock, leading to the demand for recovery of credit utilized for duty payment on Aerated Water.3. The withdrawal of Modvat credit on Aerated Water was crucial, as it impacted the utilization of inputs by the respondents. The contention was that post-withdrawal, the inputs could not be used in the prescribed manner, affecting the eligibility for credit.4. The respondents argued that the Modvat Rules did not mandate a direct correlation between inputs and final products. They claimed that the credit could be utilized for any final product's duty liability, irrespective of specific correlation requirements.5. The Collector (Appeals) considered the time limitation under Rule 57(I)(2) and ruled in favor of the respondents, emphasizing the immediate accrual and utilization of Modvat credit for duty payment before a specified date.6. The issue of recovery of Modvat credit post-withdrawal was extensively discussed, citing previous decisions and principles. The Tribunal highlighted that a statutory right, once crystallized, cannot be retrospectively taken away unless explicitly provided for. The judgments of various courts were referenced to support the decision to dismiss the appeal.In conclusion, the judgment delved into the intricacies of Modvat Rules, the impact of withdrawal on credit utilization, and the legal principles governing the retrospective alteration of statutory rights. The decision was based on established precedents and interpretations, ultimately leading to the dismissal of the appeal.