TaxTMI 
TaxTMI 
1993 (1) TMI 161
X X X X Extracts X X X X
X X X X Extracts X X X X
....tory in 1982 i.e. before 31-1-1986. Transfer of set-off amount to RG 23A account was permissible from 1-3-1986 only in respect of commodities specified in Notification 177/86-C.E., dated 1-3-1986. Their inputs and final products viz. slag and cement were not covered under the said Notification. Modvat credit for cement was allowed only from 1-3-1987. Further, slag, which is the input in question, is totally exempt from duty. Accordingly, the order of Collector (Appeals) permitting the transfer of credit from erstwhile RG-23 account to RG-23A account under Modvat Rules is not correct, it has been contended. 2. Shri A. Choudhuri, learned Departmental Representative reiterated the contentions raised in the Appeal Memorandum. He stated that the respondents should have straightway transferred a sum of Rs. 1,06,643.77 from the P.L.A. to their RG 23A account and then utilised the same for payment of duty on their final product. It was permissible at that time and that was also what the Collector (Appeals), had directed in his Order-in-Appeal. Instead, they had written to the Assistant Collector and asked for permission from him. This was not necessary at all. If they had entered into unn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....resent respondents in transferring the credit amount in their RG 23 account to their P.L.A. and thereafter debit the latter for payment of duty on their final product. Such irregular action on their part had been dealt with by the Department in separate proceedings which have now culminated in our order No. A-16/CAL/1993 Dated 12-1-1993 confirming the action of the authorities below imposing a penalty of Rs. 3,000/-. In the present case, the decision of the Collector (Appeals) has ordered transfer of the amount in question to their RG 23A account which has been assailed in the present Appeal. A decision of the Tribunal in Collector of Central Excise v. Engine Valves Ltd. has been cited by Shri Mookherjee for supporting his contention against the grounds urged in the department's Appeal and for sustaining the impugned Order-in-Appeal. We find that in the said decision, the respondents, Engine Valves were held to be eligible for proforma credit for the period prior to 1-3-1986 but the said decision was taken thereafter. It was contended by the department that this credit which was taken after the commencement of the Modvat procedure and hence not available in the RG 23 account immedi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the order dated 28-8-1985 of the Collector (Appeals). Had the Assistant Collector replied to their letter dated 16-10-1985 and either allowed their request for transfer of the amount of credit to RG 23 account or in the alternative advised them to go ahead on their own and effect the transfer as no permission was required from him, they would have been able to take the credit and utilise the credit till 28-2-1986. His silence and belated grant of permission had not helped matters. While the transfer to RG 23A at this stage in implementation of the order dated 22-8-1990 passed by the Collector (Appeals) will not be in accordance with the provisions of Rule 57H(3), the matter requires to be dealt with in the context of the earlier Order-in-Appeal of the Collector (Appeals) which is dated 28-8-1985 and which has remained unimplemented all along but more significantly remained unimplemented before 28-2-1986 when the transfer of credit permitted by him would have been meaningful as it would have been possible for the respondents to utilise the credit during the currency of Notification 201/79. Though the respondents made an unnecessary application, the problem was compounded by the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the second appellate order, any transfer to RG 23A can be only of unutilised balance of credit in RG 23 as on 1-3-1986, which should also be within the parameters of Rule 57H(3). The respondents do not satisfy the said requirement as the balance as on 1-3-1986 taken notionally could not be transferred to a RG 23A account at that time as the appellants were, then not eligible for modvat benefit for their product. When they did become eligible for the same on 1-3-1987, one year had passed and the RG 23 credit balance as on 1-3-1986 would have been unrelatable to the inputs which were being used in the manufacture of the final products manufactured by them when they entered the Modvat Club. The transition provisions for Rule 57H(1) would have had no applicability to the stocks of slag used by them from 1-3-1987 onwards as they were exempt from duty. 7. We have taken the above equitable approach to permit the transfer of credit to RG 23 account for deemed utilisation of the same from that account when it was permissible to give effect to the Order-in-Appeal dated 28-8-1985 of the Collector (Appeals). The department has contributed to the respondents' problem by delayed decision on th....