TMI Blog1994 (12) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57E is to be interpreted independently of the provisions of Rule 57A shall have an over-riding effect on the provisions of Rule 57E. (ii) Whether the credit of differential duty in respect of inputs on account of escalation of value could be allowed in terms of Rule 57E as it existed prior to amendment by Notification No. 117/87-C.E., dated 15-4-1987. (iii) Whether the Appellate Tribunal is empowered under the Central Excises Salt Act to give a relief which is not provided under the law especially when the matter is still pending final decision before a larger bench as referred by the Hon ble West Regional Bench of CEGAT with case of M/s. Hindustan Lever Ltd. v. Collector of Central Excise, reported in 1994 (70) E.L.T. 788 (T). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjust the amount in their credit account or current account or by cash within a certain period of receipt of demand under Rule 57-I. The lower appellate authority set aside the Assistant Collector s order following the judgments of the Tribunal in the case of Indo National Ltd. v. Collector of Central Excise reported in 1989 (41) E.L.T. 422 and Guest Keen William v. Collector of Central Excise reported in 1990 (47) E.L.T. 141 and directed the Assistant Collector to allow the credit under Rule 57A if otherwise eligible. Hence this appeal by the Revenue. The appeal was decided by the Tribunal against Revenue upholding the order-in-appeal passed by Collector of Central Excise (Appeals). The contentions raised in support of the department s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence Application where the questions extracted earlier have been proposed for reference to the High Court, it has been urged in support of the proposal that adjustment of duty credit is governed by specific Rule 57E and no other rule can have an overriding effect thereon. The said Rule, as it stood at the relevant time, provided that adjustment of duty credit was possible only in case of downward revision of duty and there was no scope of variation of modvat credit where the duty paid initially was revised upward. It was a self-contained rule and did not require any reference to any of the rule including Rule 57A for its interpretation.The Collector has relied upon the decision of the West Regional Bench of the Tribunal in Mahindra and Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing, Shri K.K. Dutta, learned Departmental Representative appeared for the Collector. He reiterated the submissions contained in the Reference Application and pleaded that the questions raised may be referred to the High Court. 5. Shri V. Sridharan, learned advocate who appeared for the respondents opposed the contentions in the application and supported the Tribunal decision which he submitted was correct in law following earlier Tribunal decisions which were based on a correct appreciation of the legal position. There was an apparent conflict between Rules 57A and 57E of the Central Excise Rules. The former Rule is the authority for allowing credit of duty paid on the inputs while the latter provided for variations of the credit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovide for upward variation of credit consequent to variation of duty paid subsequently, it did not provide either that such upward variation of credit in such a case should not be allowed. As Modvat credit is available to the extent of duty paid on the inputs used in the manufacture of final products in terms of Rule 57A, the upward revision of credit cannot be denied on the ground that it is limited to the duty originally paid and documented. As long as the subsequent payment of duty is properly documented and identified as duty, the same is admissible as credit. It was also observed in the order that the amendment of Rule 57E to provide for the variation of credit consequent to subsequent payment of duty was clarificatory in nature, to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that a question of law has arisen which needs to be clarified by the Honourable High Court. 6. We have, therefore, formulated the following questions of law : - 1. Whether Modvat Credit could be varied upwards corresponding to the subsequent recovery of more duty on the inputs used in the manufacture of final products when rule 57E at the material time only provided for variation of credit consequent to payment of refund on the inputs. 2. Whether such upward variation of credit could be allowed as Rule 57A being the authority for taking Modvat Credit could override the provisions of Rule 57E. 3. Whether the notifications amending Rule 57E on 1-3-1987 and on 15-4-1987 were clarificatory in nature and could be given retrospective ef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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