TaxTMI 
TaxTMI 
2011 (3) TMI 1551
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.... transfer oil by making necessary entries in RG-23A Part-I Register and thereafter took such credit by making entries in the RG-23A Part-II Register. A show cause notice came to be issued to the petitioner on the ground that the gate passes on the basis of which Modvat credit was availed of by the petitioner were valid documents for the purpose of Modvat only if the same had been issued before 1st April, 1994 and credit under the Rules had been taken on or before 30th June, 1994 as per the Notification No. 16/94, dated 30th April, 1994. The Modvat credit that had been availed of after the said date was liable to be recovered along with appropriate penalty as prescribed under Rule 173Q of the Rules. The details of the show cause notice were as under :- i. Show cause notice dated 20-2-1995 demanding duty of Rs. 44,712/- on the ground that Modvat credit had been taken on 2-8-1994. ii. Show cause notice dated 2-2-1995 demanding duty of Rs. 35,728 on the ground that Modvat credit had been taken on 3-8-1994. iii. Show cause notice dated 1-2-1995 demanding duty of Rs. 37,646 on the ground that Mod....
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.... the cover of an invoice issued under Rule 52A, an A.R.1 or triplicate copy of a Bill of Entry, a certificate issued by an Appraiser of Customs posted in Foreign Post Office or any other document as may be prescribed by the Central Government by notification in the Official Gazette in this behalf evidencing the payment of duty on such inputs. It was submitted that Rule 57G empowers the Central Government to prescribe any other document evidencing the payment of duty on such inputs received in the factory of the manufacturer. However, the same does not empower the Central Government to frame a rule prescribing a time-limit within which credit has to be taken. Thus, the prescription of time-limit is clearly beyond jurisdiction and beyond the power delegated to the Central Government under Rule 57G of the Rules. Inviting attention to the decision of this High Court in the case of Commissioner of Central Excise, Ahmedabad v. Gujarat Medicraft Pvt. Ltd., (supra) on which reliance had been placed upon by the Tribunal while holding against the petitioner, it was submitted that the said decision was rendered in a different set of facts wherein the dispute was as to whether if the gate pass....
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....nother v. Employees State Insurance Corporation, 1971 (2) SCC 860, for a similar proposition of law. 4.3 The learned counsel further submitted that once it is established that the inputs are duty paid, that such inputs mentioned in the duty paying document have been received, and that the manufacturer has used them for the purpose for which they were declared, as in the instant case, Modvat credit cannot be denied to such manufacturer. It was submitted that in any case, the time-limit prescribed by the subject notification for availing of Modvat credit by the manufacturer can only be directory. Lastly, it was submitted that once the relevant entries have been made in the register at the time of receiving the inputs in the factory which are used for the purpose of manufacturing the final product as stated in the relevant declaration, the Modvat credit is crystallized and the right to avail the same becomes indefeasible and not dependent on any post facto conditions and the action of the Department in seeking recovery/reversal of the same is illegal. It was further submitted that at the relevant time, the Act did not make any provision for lapsing of credit and that later on Se....
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.... M/s. Montari Industries Ltd. v. CCE, Chandigarh as well as the decision of this High Court in the case of Commissioner of Central Excise, Ahmedabad v. Gujarat Medicraft Pvt. Ltd., (supra). 7. The main challenge in the present petition is to the Notification No. 16/94-C.E. (N.T.), dated 30th March, 1994. A perusal of the said notification shows that the same has been issued in exercise of powers conferred by Rule 57G of the Central Excise Rules. By the said notification, the Central Government has prescribed documents specified in Column (3) of the Table annexed thereto specified in the corresponding entry in Column (2) of the said table for the purpose of the said rule. Item No. 12 thereunder reads thus :- S. No. Authority of the C.B.E. & C. or the Central Excise Rules, 1944 Documents (1) (2) (3) 12. Rule 52A (as it stood before 1st April, 1994) Gate Pass issued under Rule 52A, as it stood before 1st April, 1994. Thus, by virtue of the said notification, gate pass issued under Rule 52A of the Rules as it stood prior to 1st April, 1994 has been prescribed as a document for the purpose of Rule 57G of the Rules. However, the notification provides that the document sho....
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....-limit for taking credit. Insofar as taking credit is concerned the same is governed by Rule 57A of the Rules which lays down that the provisions of the said section shall apply to such finished excisable products as the Central Government may, by notification in the Official Gazette, specify in this behalf for the purpose of allowing credit of any duty of excise or additional duty under Section 3 of the Customs Tariff Act, 1975, (referred to as specified duty) as may be specified in the notification paid on the goods used in the manufacture of the said final products (referred to as the inputs). Sub-rule (2) of Rule 57A provides that the credit of specified duty allowed under sub-rule (1) shall be utilised towards payment of duty of excise leviable on final products, whether under the Act or any other Act, as may be specified in the notification issued under sub-rule (1) and subject to the provisions of the said section and the conditions and restrictions, if any, specified in the said notification. Thus, the manner in which credit taken is required to be utilised is laid down under sub-rule (2) and is subject to the conditions and restrictions, if any, specified in the notificati....
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....chi Karkaria Ltd. (supra), the Supreme Court in the context of Rules 57A to 57J of the Central Excise Rules, 1944 has held that a manufacturer obtains credit for central excise duty on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgment thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. The Court held that the credit is indefeasible. In Eicher Motors Ltd. v. Union of India, (supra) the Supreme Court held thus : "We may look at the matter from another angle. If on the inputs, the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a r....