TMI Blog1995 (12) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assistant Collector confirmed the demand of Rs. 4,97,118.88 being the Central Excise duty leviable on inputs lying in stock as on 30-9-1987. 2. The Department in the first instance issued a show cause notice to the respondents herein alleging that they had not fully accounted for the inputs lying in stock as on 30-9-1987 as having been disposed of in the manner specified under Chapter VAA of the Central Excise Rules, 1944. It was also stated that the respondents herein had taken credit amounting to Rs. 4,97,118.88 paid on the inputs in their RG 23A account and had utilised the credit for payment of duty on the final product viz. Aerated Water falling under Chapter Heading Nos. 22.01 and 22.02 of the Schedule to the Central Excise Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the final products in the manufacture of which they were intended to be used, was necessary. The Assistant Collector held that the inputs lying in stock as on 30-9-1987 had not clearly been utilised in the manner prescribed nor were such inputs possible to be used in the subsequent period in view of the withdrawal of the Modvat Credit with effect from 1-10-1987, on Aerated Water under the Modvat Scheme and therefore, the recovery of Modvat Credit on inputs brought for use in the manufacture of Aerated Water, but unutilised as on 1-10-1987, is liable to be reversed. 5. The respondents herein filed an appeal before the Collector of Central Excise (Appeals) who disposed of the appeal in the following terms :- I have carefully gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he withdrawal of Modvat facilities on Aerated Waters with effect from 1-10-1987 the inputs lying in stock with the respondents were not utilised in that manner and they also could not use the same in the future, as Aerated Water is no longer covered under the Modvat Scheme. Therefore, he stated that the order passed by the Assistant Collector is in order and the order passed by the Collector (Appeals) is liable to be reversed. 7. Ld. Advocate, Shri K.K. Banerjee appearing on behalf of the respondent firm contended that there is no specific provision under Modvat Rules providing for recovery of Modvat credit, in respect of any particular commodity, and credit allowed is utilised under Rule 57F if the inputs are received prior to the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Guntur v. Sri Sarva Raya Sugar (Bottling Unit) Ltd., reported in 1992 (59) E.L.T. 125 (Tri.) = 1991 (37) ECR 617. It was held therein that there is no specific provision under Modvat Rules providing for recovering Modvat credit if, in respect of any particular commodity, credit allowed is utilised under Rule 57F and facility of Modvat is withdrawn and the inputs received prior to the date of withdrawal of the Modvat facility are still lying unutilised. Holding that credit had been correctly taken and utilised, they dismissed the Department s appeal. We find that this discussion of the Tribunal is in line with the judgments of different High Courts in similar matters involving utilisation of credit during the currency of cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification came to be rescinded, the manufacturers of Vanaspati and Soap ceased to earn the benefit of credit of money while manufacturing their final products with the help of notified inputs but they were not deprived of their right to utilise the credit of money which they had already earned validly so long as the same was or, intended to be, used for payment of excise duty in the manufacture of Vanaspati or Soap as the case may be. Merely because the notifications have been rescinded, it cannot be said that Rule 57N had ceased to operate. The Honourable Punjab and Haryana High Court rendered a similar decision in Amrit Vanaspati Co. Ltd. v. Union of India vide 1990 (50) E.L.T. 64. 9. It is thus seen that the present case is square ..... X X X X Extracts X X X X X X X X Extracts X X X X
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