TaxTMI 
TaxTMI 
1995 (8) TMI 150
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....had argued that they had a balance of Rs. 47,014.95 out of the amount of Rs. 2,77,353.84 and not of the amount related to inputs received after 1-3-1986, they had not been able to substantiate as to how much amount was utilised after payment of duty out of the balance said to be available as on 1-3-1986 when they were availing proforma credit procedure under Rule 56A. She had, therefore, declined to interfere with the order and rejected the appeal. 2. The facts of the case as set out in the appeal are that the appellants were earlier availing of proforma credit under Rule 56A of Central Excise Rules, 1944. They had applied for permission to transfer the balance lying in their R.G. 23 Part II to R.G. 23A Part II required to be maintained by them for availing the procedure under Rule 57A, claiming such transfer to be admissible under Rule 57H(3). The Superintendent of Central Excise, Ludhiana under his letter dated 26-5-1986 informed them as follows :- "I am directed to convey that the Assistant Collector, Central Excise, Ludhiana is pleased to allow you to transfer the amount of BED amounting to Rs. 2,77,303.84 lying in balance in RG-23 Part II (under Rule 56A) to RG-23A ....
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....al Excise Range gave remarks about Asstt. Collr. Central Excise permission to transfer credits in RG 23 Part II under Modvat scheme later on refusing the same on the grounds that credit was wrongly granted by Asstt. Collr. Central Excise, Chandigarh. Once the modvat credit was granted by the Asstt. Colr. its refusal or recovery of the amount already allowed without issue of a show cause notice and without affording an opportunity to the appellant to put forth the plea is in violation of principles of natural justice. I, therefore remand back this case to Assistant Collector concerned for de novo considerations after issue of a show cause notice and granting personal hearing to the appellants." On such remand, the Assistant Collector issued show cause notice and, after their reply and personal hearing, reviewed the previous permission granted for the transfer of credit and disallowed the same. Their appeal to the Collector (Appeals) against the Assistant Collector's said order was rejected as already indicated above in para 1 supra. 3. In the present appeal, it has been contended that the Collector (Appeals) had originally only set aside the Assistant Collector's le....
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....eir RG-23A Part II account for availing Modvat benefit and that the Assistant Collector, having allowed the same, could not review that decision and disallow the credit subsequently. We find that there has been lot of confusion in the matter both on the part of the departmental officers and on the part of the appellants which has also been admitted by both of them in their communications addressed to each other. Thus the Assistant Collector in his de novo adjudication order dated 11-11-1987 has stated in his order (Page 3 of his order) that "because of the fact that after the introduction of Modvat Scheme remained a confusion upto an extent of certain degree about the exact implication of the transfer provisions as outlined in Rule 57H party was initially allowed such transfer. But subsequently when the matter was examined at length it was found that party had opted for availing Modvat on 1-4-1986 as could be obvious from their letter dated 20-6-1986. The provisions of Rule 57H which became ineffective after 31-3-1986 could not take care of the instant situation." As far as the appellants are concerned their doubt in the matter is indicated in their reply to the show cause no....
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....at they had a closing balance of credit in RG 23 Part II as on 28-2-1986 of Rs. 47,014.95 (B.E.D.) and Rs. 23,708.77 (S.E.D.). They took credit of Rs. 2,30,338.89 in March 1986 and the closing balance as on 31-3-1986 was Rs. 2,77,353.84 B.E.D. and Rs. 23,708.77 S.E.D. In terms of Rule 57H(3), transfer of credit from RG 23 Part II account to RG 23A Part II account is limited to the credit lying unutilised before the commencement of Central Excise (Seventh Amendment) Rules, 1986. These rules contained the necessary provisions for the introduction of Modvat scheme. Thus, under Rule 57(3), only the RG 23 Part II balance of credit lying unutilised before the introduction of Modvat scheme on 1-3-1986 was eligible for the transfer to RG 23A Part II account. Subject to verification of the data given by them with reference to their records and registers, only the sum of Rs. 47,014.95 B.E.D. and Rs. 23,6708.77 would be eligible for such transfer. The credit for inputs received in March 1986 which they took in their RG 23 Part II account under R....