2002 (12) TMI 222 - HC - Central Excise

Cash refund / adjustment of modvat credit adjustment in pursuance of court orders Held tht - It is true that this court has directed the respondent authorities to make the payment in cash or by way of adjustment. Looking to the said fact it cannot be said that petitioner No. 1 had a right to demand cash. However the adjustment which is to be made by the respondent authorities must be made as soon as possible - . It is clarified that it would not be necessary for the petitioners to make any application for getting the amount of refund as provided under Rule 57F of the Central Excise Rules as the petitioners have already indicated their desire in this petition that petitioner No. 1 would like to have the amount payable to it in cash.

Summary

Issues involved:
Non-compliance of court order regarding restoration of Modvat credit.

Detailed Analysis:
The grievance in the petition pertains to the non-compliance of an order dated 22-2-2002 by the respondent authorities regarding the restoration of Modvat credit in favor of the petitioner. Despite the court's directive, the authorities failed to make the payment or adjustment as instructed, leading the petitioners to approach the court. The Department's challenge to the judgment in the Supreme Court was rejected, further emphasizing the need for compliance with the court's order (2005 (185) E.L.T. 19 (Guj.), 2005 (186) E.L.T. A117 (S.C.)).

Upon approaching the respondent authorities following the court's judgment, an order dated 13-9-2002 was passed proposing the restoration of Modvat credit but the payment of the specified amount had not been made to the petitioner as directed by the court. The respondent contended that the amount payable could be adjusted from the petitioner's ledger account, emphasizing that the payment could be made either in cash or through adjustment, as per the court's observation and relevant provisions (Government Notification No. 85/87-C.E., Rule 57F of the Central Excise Rules, 1944).

The respondent authorities highlighted the procedure for refund under Rule 57F of the Central Excise Rules, stating that the petitioner needed to submit an application for refund at the end of each quarter. The respondent's stance was that upon the submission of a refund application as per the rules, the amount payable to the petitioner would be determined and paid accordingly. The court acknowledged the petitioner's entitlement to the Modvat credit and directed the authorities to make the adjustment by a specified date to ascertain the amount due to the petitioners as of that date, ensuring timely payment to the petitioner without the need for a separate refund application.

In conclusion, the court directed the respondent authorities to adjust the amount in the petitioner's ledger account by a specified date to determine the payable amount, which should be paid to the petitioner by a set deadline. The court treated the petition as an application for refund, eliminating the need for a separate application process and ensuring compliance with the court's order for the restoration of Modvat credit.