TaxTMI 
TaxTMI 
1991 (1) TMI 145
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....d excisable goods. The petitioner, accordingly, filed a declaration before the jurisdictional Assistant Collector of Central Excise, as required under the Rules and started availing of the benefit under the Modvat Scheme. Monthly returns were filed and a credit account in Form No. RG 23A Part I and II was also maintained. The Classification List was approved by the Assistant Collector effective from 21-3-1986 as per the Endorsement made in Annexure-C. 3. By letter dated 4-5-1987 (Annexure-D), the Superintendent of Central Excise, Hospet, called upon the petitioner to resubmit the declaration in form-I giving better particulars of the final products as also the inputs used in the manufacture of the products. The petitioner sent a reply dated 21-5-1987, as per Annexure-'B' stating that the petitioner was manufacturing and fabricating in their factory only parts of components of hydraulic structurals such as, gates, hoists etc., for assembly at the site. It was also submitted in the said reply that the petitioner had, in the list sent by them in accordance with Rule 57-I, furnished all the details required in the proforma. A copy of the declaration is filed under Rule 57G is produc....
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....is also the case of the Department that the schemes contained in 56A providing for proforma credit, the Modvat credit in 57A providing for money credit under Rule 57K are all self-contained schemes prescribing the period of limitation, wherever it is found necessary and that, therefore, the provision 11A should not be imported into the scheme of Modvat. 8. The learned Counsel has also relied upon the decision of the Supreme Court in Shivaram v. Radhabai (AIR 1984 SC 786), in which it was held that it is not permissible to accommodate individual version, which may appear reasonable when the intention of the Legislature has been expressed with sufficient vocabular clarity. Reliance was also placed on the decision of the Supreme Court in Assistant Collector of Central Excise v. Ramakrishna Kulwant Rai (41 E.L.T. 3), wherein the validity of Rule 10A was upheld even though it did not prescribe any period of limitation. The action of the respondents in disallowing the credit was, therefore, justified on these grounds. 9. The alternative argument of Shri Ashok was that an opportunity of being heard would be given to the petitioner in case this Court comes to the conclusion that such....
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....istant Collector of Central Excise pay the duty leviable on such inputs within 10 days of the notice of demand". This Rule provides for recovery of credit wrongly availed of or utilised in an irregular manner. Under the rule, if the proper officer finds that any credit of duty paid on inputs has been taken wrongly, may disallow the credit and adjust in the credit account or current account maintained by the manufacturer or if such adjustment is not possible for any reason, by cash recovery from the manufacturer. Applying this Rule, the Superintendent of Central Excise issued to the petitioner an Endorsement, as per Annexure-H. This was followed by Annexure-H1, intimating the petitioner-company that whatever Modvat credit was availed of by it upto 16-10-1987 may be debited in PLA and compliance reported. 11. The learned Counsel has sought reliance on several decisions of the Appellate Tribunal in support of his contention on point No. (ii). Several Benches of the CEGAT have taken a consistent view that the effect of disallowance of an inadmissible credit would, in effect, is a recovery under the Act and the provisions of Section 11A would stand attracted. Since there is no ....
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....edit disallowed, if the credit has been utilised, or shall not utilise the credit thus disallowed. (2) If any inputs in respect of which credit has been taken are not fully accounted for as having been disposed of in the manner specified in this section the manufacturer shall upon a written demand being made by the Assistant Collector of Central Excise pay the duty leviable on such inputs within 10 days of the notice of demand". The argument developed on the basis of this substitution is that any recovery after disallowing the Modvat credit even for the period prior to the amendment of Rule 57-I should be subject to the provisions of Rule 11A, as laid down by the CEGAT. It was also submitted that Rule 57-I is only procedural and the substantive provision for recovery under the Act is 11A. Therefore, the argument against Rule 57-I, as it stood before amendment, is that the said Rule does not provide for any procedure to adjudicate the dispute and confers arbitrary power on the department. 13. The learned Counsel has also relied upon the decision of the Supreme Court in J.K. Spinning and Weaving Mills Ltd. & Anr. v. Union of India & Ors. [1987 (32) E.L.T. 234], and in partic....
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....hing the point in issue and the case law. 15. At the outset, it must be noticed that the Department appears to have accepted the decisions of the CEGAT rendered in a number of cases referred to earlier, which support the contentions of the petitioners. From the very fact that the Central Government decided to amend the rule itself, which was done with effect from 6-10-1988 by inserting limitation in Rule 57-I, it can be presumed that the intention of the Legislature was to amend the rule to bring it in conformity with the spirit and scope of Section 11A. The effect of the subsequent amendment to Rule 57-I is a point in favour of the petitioner in the interpretation of Rule 57-I, before amendment, as contended for by the petitioner. 16. Under the scheme of Modvat credit in Chapter 4AA of the Rules, the assessee gets a rebate on the duty payable on the final products to the extent the duty is paid on inputs. This is in addition to the proforma credit allowed under Rule 56A. Under Rule 56A, the proforma credit of the duty paid on the inputs, material or component parts, is allowed provided the finished excisable goods and the material or component parts are eligible to duty unde....