TMI Blog1990 (11) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing, the learned Counsel for the respondents referred to two decisions of the South Regional Bench on identical issues. These have been reported in 1989 (41) E.L.T. 422 (Tribunal) and 1990 (47) E.L.T. 141 (Tribunal). Two similar appeals had been decided by this Bench itself. These also dealt with the same issue of the eligibility for modvat credit of differential duty paid subsequent to the clearances of the eligible inputs. 3. Shri A. Chaudhuri, learned Departmental Representative argued in support of the appeal. He referred to the points raised therein and submitted that the variation in credit taken could be regulated in this case only in terms of Rule 57E, as it stood at the material time, namely, March 1986. The said Rule then did not provide for the variation of credit consequent to recovery of more duty from the manufacturer which provision was built into the said Rule only by amendments introduced in March 1987 and April 1987. It was, therefore, irregular availment of credit by the respondents. He also contested the other finding of the Collector (Appeals) that for credits taken in March 1986 and April 1986, the demand issued in 12-8-1988 was hit by bar of limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that duty subsequently paid is not duty paid on goods received earlier for being used as inputs within the meaning of Rule 57A. Rule 57E is a procedural rule as against substantive rule governing modvat credit contained under Rule 57A ibid. We had endorsed the same view taken by him when we disposed of the appeal referred to above. I follow the same ratio in the present case also. The Collector has also relied upon the case of Indo National Limited v. Collector of Central Excise [1989 (41) E.L.T. 422 (Tribunal)]. The South Regional Bench had held in their decision as follows :- ......."we are of the view that there should be a variation in the rate of duty payable in respect of the input either by operation of law or by otherwise and in the present case it cannot be disputed that there was no variation in regard to the duty payable for the input in question and the same continued to be at 20% right through. Merely because the supplier committed a mistake in not clearing the input by paying 20% duty and paid duty only 12% duty and subsequently paid the differential duty of 8%, it would not amount to variation of the rate of duty within the meaning of Rule 57E extracted ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that Rule 57E is not applicable, the appeal relies upon the same rule for defending the proposition that there was a provision therein for adjustment of the credit taken only in the event of variation of duty paid on the inputs due to grant of refund and that the said rule did not contain any similar provision for revision of the credit amount due to variation of the amount of duty due to subsequent recoveries of short-levied amounts. This reasoning does not appeal to me. While, undoubtedly, the said Rule 57E, at the material time, did not contain any express provision for the grant of additional modvat benefit to the extent of the duty paid subsequent to the clearance which had been short levied earlier, there was, by the same token, no express bar either prohibiting the grant of such addition credit. In other words, Rule 57E was silent on the question of admissibility of such short-levied amounts paid subsequently qualifying for modvat benefit. In the circumstances, the substantive provision of 57A, which provides for allowing credit of any duty of excise paid on the inputs for utilising towards payment of duty of excise leviable on the final products will prevail. Reading R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no change in the rate of duty. Rule 57E even in its unamended form was applicable to regulate enhancement of modvat benefit consequent to payment of additional amounts of duty subsequent to clearance. The differential duty has been correctly availed of as modvat credit by the respondents. The Collector (Appeals) had rightly allowed the appeal. The present appeal, therefore, fails. 8. Once the appeal has been decided on merits and held to be untenable it may be in the nature of an anti-climax to come to the same conclusion on the limited question of time bar. However, since the Collector (Appeals) was called upon to decide this issue also and in fact did so and as the present appeal also has called into question this aspect as well, I would proceed to deal with the same. Since despite authoritative decisions by different High Courts and Tribunal Benches that even for recovery of wrongly availed credit, whether under Rule 56A or 57-I or in terms of Notification 201/79, dated 4-6-1979, the time limits under the appropriate provisions Rule 10 or Section 11A, as the case may be, would apply, appeals are filed and argued advancing contrary views, I take the opportunity to refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Rules, 1944. The Tribunal relied upon the decision of a Division Bench of the Bombay High Court reported in 1986 (23) E.L.T. 357 Bombay when they went into the applicability of Central Excise Rule 10 in a situation where credit had been erroneously availed of under Rule 56A. The Court held that where credit had been erroneously given under Rule 56A, the product is underassessed to duty and there is short levy. The assessment has to be reopened. Rule 10 was held to be applicable and Rule 10A excluded. The Tribunal also referred to another judgment reported in 1979 E.L.T. J 307 where a Division Bench of the Andhra Pradesh High Court held in Jay Engineering Works Ltd. v. Govt. of India Others that in the case of recovery of credit erroneously availed of applying Rule 56A, the provisions of Rule 10 would apply. This case pertains to a period prior to the amendment of Rule 56A to provide for a time limit for recoveries. Accordingly, it was held by the Tribunal that the demand for recovery of credit alleged to be erroneously availed of amounts to short levy and hence the notice was hit by limitation. 9. The facts of the present case, as far as the question of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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