TMI Blog1998 (10) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Speed Diesel oil (HSD) and claiming Modvat credit. Rule 57A of the Central Excise Rules, 1944, provided for credit to be availed on inputs specified in the notification issued under the powers of that rule. Notification No. 5/94, dated 1-3-1994, as amended, specifically exempted HSD oil from the list of eligible goods. On 16-3-1995, vide Notification No. 11/95-C.E. (N.T.), Rule 57D was amended enabling credit to be taken for inputs used for captive generation of electricity. This provision was deleted on 1-3-1997 on which date Rule 57B was introduced vide Notification No. 6/97-C.E. (N.T.), dated 1-3-1997. This rule declared certain goods (later termed as inputs vide corrigendum dated 10-3-1997) as inputs eligible for Modvat credit not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input would continue to be as stipulated under Rule 57A and that it would not be over-ridden by the term input under Rule 57B. On this logic, he decided that the credit was wrongly taken. He reversed the credit taken, directed recovery thereof and also imposed a penalty equivalent to the Modvat credit wrongly taken. 5. Shri M.P. Devnath, ld. Advocate argued for the appellants and Shri Y.R. Kilania, ld. DR supported the Commissioner s findings. 6. During the contested period, Rule 57B was on the statute book. This rule was meant to extend the Modvat credit facility to those inputs which obviously did not fit in the scheme prescribed under Rule 57A and the notifications issued thereunder; but on which it was thought expedient for Mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 57B is also a part of MODVAT Scheme, and is governed by the basic structure of the scheme, the non-obstante clause cannot be read as covering all the provisions of Rule 57A. A careful reading of Rule 57B, however, makes it clear that the same is intended to give an overriding effect on credit of duty amount and as per the law of interpretation, the provisions with non-obstante clause will prevail over the provisions of the clause sought to be excluded. The decision of Andhra Pradesh High Court in Parasuramaiah v. Laxmanna AIR 1965 AP 220, referred to be the ld. Sr.Advocate for the appellants, also holds accordingly. The decision of the same High Court in Gowramma v. Yella Reddy AIR 1985 AP 226, referred to by ld. SDR, however, is in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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