TaxTMI 
TaxTMI 
1994 (5) TMI 98
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....ions are as follows :- (i) Whether the Hon'ble CEGAT was correct in ordering deemed transfer of the P.L.A. amount to RG-23 account and permit its deemed utilisation till 28-2-1986, especially when the Central Excise law does not provide for such deemed transfers, nor does the law permit any such relaxation. (ii) Whether the Hon'ble CEGAT was correct in ordering crediting of an equivalent amount in the P.L.A. after effecting the deemed transfer, for further utilisation by the party, especially when, what can be credited to the P.L.A. is amount credited by cash/cheque in bank and all such credits ....
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.... Credit from RG-23 Account to their P.L.A. culminating in the issue of the Order-in-Appeal dated 28-8-1985 directing them to deposit the amount in P.L.A. afresh and transfer the debits wrongly made in the P.L.A. to their RG-23 Account to regularise the mistake and for use of such amounts in the RG-23 Account for payment of duty. When this order was passed, Notification No. 201/79 was in force. They made the deposit of money in their P.L.A. as ordered by the Collector (Appeals) but instead of immediately transferring to their RG-23 Account the amount wrongly transferred to their P.L.A. from their RG-23 Account earlier, they wrote to the Assistant Collector of Central Excise, Sambalpur Division vide their letter of 16/19-10-1985 for grant of ....
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....r of the present Reference Application. It was contended in the appeal that the respondents were not entitled to the Credit in terms of Rule 57H(2) as the inputs had been received in their factory in 1982 before 31-1-1986. Transfer of set-off amount to RG-23A Account is permissible from 1-3-1986 only in respect of commodities specified in Notification No. 177/86-C.E., dated 1-3-1986. The inputs in question were not covered in the said Notification. Only from 1-3-1987 was their final product, Cement, covered under the MODVAT Scheme. By that time, the inputs in question, slag had become exempt from duty. Hence it was contended that the order of Collector (Appeals) permitting transfer of Credit from erstwhile RG-23 Account to the RG-23A.....
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.... lying in their P.L.A. which was directed to be transferred to the RG-23 Account under the Order-in-Appeal of the Collector (Appeals) should be deemed to have been transferred accordingly and the quantity of Cement cleared on payment of duty of that amount should be deemed to have been cleared against such amount in RG-23. The effect of the transfer of Credit from P.L.A. to RG-23 and adjusting the clearances of the appropriate quantity of Cement against such deemed transfer of Credit to RG-23 would release the equivalent amount in P.L.A. which will be available now after the said transfer adjustment is made. This will enable them to get the benefit due to them in terms of the appellate order of August, 1985. It has been contended in the Ref....
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....amount from RG-23 Account to RG-23A Account. For one thing, the amount in question was not in the RG-23A Account as it was still in the P.L.A. only. For another, such transfer was not permissible since it was not in accordance with Rule 57H(3) which provided for the transfer of unutilised balance to RG 23A Account for Modvat Credit in appropriate cases. That transfer was held to be inadmissible by us but we supported the finding of the Collector (Appeals) for grant of permission to utilise the Credit in question by arriving at that finding by a different approach. We held that the transfer of the amount is to be effectuated by an accounting exercise, as indicated by us. We had observed that it was an accounting irregularity or mistake ab in....
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.... to derive the benefit due to them in respect of the Credit accrued to them on account of duty paid on the inputs received by them and used by them in the manufacture of their final product, Cement. Duty could be paid by them either through P.L.A. or through RG-23 Account. Their committing a wrong by transferring the Credit amount to their P.L.A. and then utilising it instead of utilising it straightaway from the RG-23 itself had to be set right. As they were made to deposit the amount once again in the P.L.A. and thereafter transfer the amount to RG-23 and then utilise the latter for payment of duty, they should be permitted to use the same for such payment of duty through RG-23 Account which was permissible upto 28-2-1986. This is what wa....