TaxTMI 
TaxTMI 
TaxTMI 
1995 (1) TMI 195
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.... existed prior to amendment by Notification No. 117/87-C.E., dated 15-4-1987". In the said order of this Bench it was held that the respondents herein were entitled to adjustment in credit account of differential duty paid upto 4-2-1986 either by adjustment in their RG 23A account or PLA (Personal Ledger Account) or in cash. This was in line with a decision of the West Regional Bench in Hematic Motors Ltd. v. Collector of Central Excise reported in 1991 (52) E.L.T. 532. Proviso 5 under sub-rule (2) of Rule 56A was applied in that case; Adjustment of Credit in the present case for duty paid upto 4-2-1986 was decided as above as the credit in question was earned when Rule 56A was applicable to them. For the period after 1-3-1986, it was held that they were entitled to adjustment of credit in terms of two decisions of the East Regional Bench of the Tribunal reported in 1990 (47) E.L.T. 389 and 1990 (47) E.L.T. 394 wherein it had been held that Modvat credit was admissible in respect of duty payment effected subsequent to the stage of clearance of the inputs. As long as such subsequent duty payment was correctly authenticated, the benefit of Rule 57A was available and could not be whi....
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....of credit is apparently instantaneous ......................................................................................................... The scheme provides for variation in the credit already taken by a separate rule, which can be identified only as Rule 57E. When that Rule does not, during the material period, provide for contingency of this nature namely varying credit to the extent of differential duty paid later consequent upon the demand on the input manufacturer, we are only to conclude that the Policy Makers did not provide for such contingencies for reasons best known to them. It is not open to us to read more than what is specified in the Rules. Presumably because of the representations on this score, Rule 57E appears to have been modified providing for variation in the credit on ground of refund of input duty or enhancement of input duty due to demand. It is settled law that the authorities functioning under the statute are to go by the provisions of the rules and cannot be expected to supplement or add to the Rules, where they do not exist." The contrary view was that Modvat credit could be adjusted upward consequent to payment of additional duty subsequent to t....
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....en two Benches of the Tribunal and in the absence of any decision on the issue by a High Court or the Supreme Court, this Bench had proposed referring the questions as framed by the Collector in his Reference Application and placed the proposal before both the sides when they addressed further arguments on the same. While the revenue supported the reference of the questions as framed originally, it was strongly resisted by the learned Chartered Accountant, Shri S. Madhavan who appeared on bahelf of the respondents. He submitted that the first question does not merit approval and only the second on may be referred. In this connection he referred to another decision of the East Regional Bench in Collector of Central Excise v. Union Carbide India Ltd. reported in 1991 (54) E.L.T. 342, relevant portion of which he read out in support of his contention that the Tribunal has passed the instant order on a correct and harmonious construction of Rules 57A and 57E. The said extracts are as below :- "7. While, on the one hand the South Regional Bench decision stems from the fact that Rule 57E is not applicable, the appeal relies upon the same rule for defending the proposition that ther....
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....n, therefore, be said to be clarificatory in nature which would have effect from 1-3-1986 itself when the modvat provisions were first introduced. Such a retrospective benefit has, actually been extended by the department in regard to the amendment in the Explanation Clause in Rule 57A whereby the scope of the term `input' was extended to cover goods manufactured and used within the factory of production in or in relation to the manufacture of final products. Though the specific coverage of the expression inputs for such goods was brought into effect vide Notification No. 197/86, dated 14-3-1986, the benefit of the amendment has been given retrospectively from 1-3-1986 itself apparently because the said amendment merely clarified the scope of the term and did not have the effect of conferring any greater benefit than what was available already. Such a view can be taken regarding the amendment of Rule 57E also. In this, I respectfully disagree with the obiter of the South Regional Bench decision in Indo National Limited matter (supra) that Rule 57E would not apply where there is no change in the rate of duty. Rule 57E even in its unamended form was applicable to regulate enhancement....