TaxTMI 
TaxTMI 
2000 (10) TMI 958
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....red to be made in Register having been made, the price for those inputs was revised by the manufacturer of the inputs and consequently additional duty that had become payable on the enhanced price which was paid during the period from 19-12-1986 to 28-10-1987. The credit for the amount so paid was taken by the assessee in the relevant registers between 16-8-1987 and 30-12-1987. The differential duty in respect of which credit was so taken was in the sum of Rs. 6,43,994.47. 3. The Modified Value Added Tax Scheme was introduced from 1-3-1986. Prior to its introduction, the scheme prevailed was Proforma Credit Scheme. Under the Proforma Credit Scheme in the 3rd proviso under Explanation 2 to Rule 56A(2) it was provided that if the duty paid on the material or on the components parts for which credit has been allowed under the sub-rule be varied subsequently due to any reason resulting in the payment of refund, to or recovery of more duty from the manufacturer or importer as the case may be of such material or component parts, the credit shall be varied accordingly by adjustment in the credit account maintained under sub-rule (3) or in the account current maintained under sub-r....
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.... Rule 57E as it stood from 11-5-1987 till 15-4-2000 reads : (i) If a manufacturer of final products has taken credit on any inputs and subsequently it so happens that any refund of the duty paid by the manufacturer of inputs or importer of inputs, as the case may be, is allowed to him for any reason, then the manufacturer of the final products shall accordingly adjust the amount of credit in his credit account and if such adjustment is not possible for any reason, the manufacturer of the final products shall pay the amount in cash equal to the amount of refund allowed to the manufacturer of inputs or importer of inputs. (ii) If a manufacturer of the final products has not taken any credit or has taken credit on any inputs and subsequently it so happens that any additional amount of duty is recovered by the manufacturer of such inputs or importer of such inputs in respect of such inputs, then the manufacturer of the final products shall be allowed an additional credit equal to the amount of duty recovered, if the manufacturer or importer of such inputs has passed on the incidence of the additional am....
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.... procedure are retrospective unless there is some good reason or other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect the rights of the parties it will be held to apply prima facie to all sections pending as well as future." The proposition so stated is too well recognised to need any further elucidation. That principle has been reiterated by the apex court in several subsequent rulings to which it is unnecessary to refer. 7. Rule 57A which deals with substantive right of the manufacturer manufacturing specified product, with regard to the extent of his right to claim credit of the duty paid on inputs, specifically provides that his right is to take credit for the duty "paid on goods used in or in relation to manufature of the said final product". 8. As originally framed with amendments upto 15-4-1987, Rule 57A read thus : 57A. Applicability. - (1) The provisions of this Section shall apply to such finished excisable goods (hereinafter referred to as the 'final products') as the Central Government may, by notification in the Official Gazette, specify in this behalf for the purpose of al....
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.... as inputs in the manufacture of the specified final products referred to in the rule. The duty paid must necessarily refer to the whole of the amount of duty paid, and not only a part. It must again refer to the duty paid not merely at the stage of the provisional assessment but at the stage of final assessment. It must also necessarily include not only the duty paid when the price with reference to which duty was paid was provisional, but also the duty paid when the price, after modification, became final price resulting in the payment of either additional duty or reduction in the extent of liability for payment of duty. 10. The scope of the provision again must be determined in the background of the objective sought to be achieved by the Modvat scheme, and also bearing in the mind, the need to harmonise the rules which deal with the scheme. The substantive right conferred by Rule 57A is not to be whittled down unless the Legislative intention to so whittle down has been set out expressly or is necessarily implicit in any part of the statute or the Rules. The procedures laid down in the later rules, cannot reduce the width of the earlier rule which deals with the substant....
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.... cover of any one of the documents prescribed, the manufacturer does not have the right to take any credit for the duty and on inputs. Proviso does not therefore come in the way of the manufacturer taking credit on the same inputs in respect of the further amount paid as duty on the inputs which had already been received under the cover of any one of the documents specified in the proviso of Rule 57G(2). A proviso should always be so construed as to limit its application to the things specifically dealt with therein, and is not to be so construed as to imply something which is not explicitly covered therein. The fact that the proviso does not refer to the additional credit being taken on the inputs by reason of further amount having been paid towards the duty on the inputs received, does not imply that the manufacturer has no right to take such credit. 14. Rule 57E which deals with adjustment in duty credit, initially dealt with only one aspect of the adjustment, namely, the fact of refund of a part of the duty paid by a manufacturer or by importer of the inputs. It did not deal with the other aspects namely the effect of the further payment towards duty after receipt of th....