TMI Blog1994 (12) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... 90, dated 17-5-1989 passed by Assistant Collector of Central Excise, MOD III, New Delhi whereby he had, inter alia ordered that any Modvat credit taken by them from 1-4-1986 be paid back. The Collector (Appeals) had, while rejecting their appeal and confirming the Assistant Collector s order, held that though their plea, that no notice was issued was factually sustainable, it did not have much force in the particular facts and circumstances of the case. He observed that when they had got a favourable order in respect of the issue involved in the show cause notice it was neither fair not proper on their part to go back on their promise and object to the order of the Assistant Collector asking them to pay back the credit wrongly taken from 1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit sought by them. As such full exemption from duty is admissible only when Modvat credit is not availed of. The Assistant Collector had rightly held that the credit taken by them from 1-4-1986 be paid back. In support of his submission Shri Bhartiya referred to the decision of the West Regional Bench in Superflex Engg. Polymers Pvt. Ltd. v. Assistant Collector of Central Excise -1988 (38) E.L.T. 219. He pointed that as the appellants had themselves offered to pay the amount the question of issue of show cause notice did not arise. 4. We have considered the submissions made. We have persued the record. In the appeal it has been explained that the question of opting out of Modvat scheme in the same financial year was not very clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assistent Collector, as upheld by the Collector (Appeals) calling upon them to pay back the credit taken by them, cannot be faulted. When they availed full exemption from duty, there was no provision for taking Modvat credit either under the Notification itself or under Rule 57C. There was no purpose also to be served by their taking such credit as the same, if taken, was only to be used for paying duty on their final product. If such final product did not discharge duty there was no purpose served by taking the credit in question. The reliance placed by the appellant on the applicability of Section 11A is not justified as it is not a case of short levy or non levy or erroneous refund. Where credit is taken but not utilised, it is not a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking a departure from the fundamental rule of natural justice was there. Applying the ratio of the above judgment to the present case, we find that the appellants had initially applied for Modvat Credit and taken the credit. Their application was returned to them with certain remarks and they never re-submitted the same since they applied for complete exemption from duty under Notification 175/86, dated 1-3-1986. The exemption claimed by them was admissible only in case they did not avail Modvat Credit. Hence non-avialment of such credit was a precondition for availing complete exemption. It was required of them to forgo the credit if taken or availed already by them, before availing full exemption. They had rightly consented to pay back t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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