1996 (10) TMI 296

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....for taking credit in respect of the inputs was brought into force by way of Modvat Scheme. Under this scheme, under Rule 57H(3)(b) the credit which might have been available in terms of Rule 56A in RG 23 Register was allowed subject to permission by Collector to be taken in credit in RG 23A Part II. The respondents have sought for this facility or in the alternative refund of the amount in cash. 2. The learned JDR has pleaded that the learned lower authority was in error in having allowed the transfer of the credit under Rule 57H(3)(b) inasmuch as the notification had been rescinded on 1-3-1986 and the respondents could have utilised this credit only in case they had opted for Modvat credit on that date when the Modvat scheme came t....

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....resent case however there is a legal complication. We observe that Notification No. 201/79 does not envisage the grant of credit available on the books by way of refund. This notification is in the nature of an exemption notification and the relief granted to the finished product the extent is only to of duty which is attributable to the inputs used for the purpose of finished goods as set out in the notification. The relief is therefore in respect of finished goods and the credit taken is only a medium or method for payment of duty for redief under the notification. The notification does not carry any provision as such for grant of credit by way of cash. So far as the benefit of credit by transfer under Rule 57H(3)(b) is concerned, we obse....

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.... the benefit of this credit. In the case of the respondents the position is slightly different. They had been denied the benefit of the credit because of the action of the authorities. In such a situation the question that arises is whether the assessee should be put in a position where the authorities have set the position right legally, the respondents should be denied the consequential benefit. In this context the learned Consultant has referred to the judgment of the Tribunal in the case of M.R.F. v. Collector of Central Excise reported in 1990 (50) E.L.T. 546. In that case the issue before the Tribunal was in the context of Notification No. 95/71 subject to the following of 56A procedure. However this notification is not before us toda....