TMI Blog1999 (2) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the manufacture of goods falling under Chapter 72 of the Central Excise Tariff Act 1985 and have been availing the Modvat facility by filing declaration under Rule 57G of the Central Excise Rules 1944. According to the appellants they have received inputs during period December, 1994 to February, 1995 with the valid duty paying documents, made entries in RG-23A Part-I immediately on receipt of the inputs but entries in RG-23A Part-II were made subsequently. 4. Arguing for the appellants Shri V. Sridharan learned Advocate submitted that the proviso to Rule 57G providing for time limit of six months has come into effect on 29-6-1995. Relying upon the decision of the Larger Bench of CEGAT in the case of Tata Engineering Locomotive Co. v. Collector of Central Excise, Bombay reported in 1996 (87) E.L.T. 157, he submitted that the amendment to proviso to Rule 57G of the Central Excise Rules 1944 is not retrospective. Particularly he referred to the para 13 of the said order wherein it was held that the amendment has no retrospective effect and cannot apply to situations which crystalised before 29-6-1995. He said in the instant case the receipt of inputs and entries in RG23A P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermining the admissibility of credit is the receipt of inputs and not the act of taking credit. Merely because the credit was not taken at that time, it cannot be held that credit was not available. Credit accrues to the manufacturer when the inputs are received and the provision applicable as on the date of such receipt would govern the situation. He referred to the decision of the Supreme Court in the case of S.S. Gadgil v. M/s. Lal and Co. (AIR 1965 SC 171) with reference to the Income Tax Act, wherein it was held that the period prescribed by Section 34 for assessment is not a period of limitation. The section in terms imposes a fetter upon the power of the Income-tax Officer to bring to tax escaped income. It prescribes different periods in different classes of cases for enforcement of the right of the State to recover tax. Further it was held that the authority of the Income-tax Officer under Section 34 (1) (b) Proviso (iii) prior to its amendment by Section 18 Finance Act, 1956 having already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period by that amending Act. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. of the Bombay High Court, mainly relied upon by the other side are not relevant to the issue involved herein. The first case was with reference to the Income Tax Act for re-opening of assessment and it is not a case of re-assessment in the instant case, hence same is not applicable. Similarly the latter case referred to above did not go into the issue whether limitation under old Rule 11 or under new Rule is applicable but issue was decided from the jurisdiction point of view whether substantive right was subject to limitation under the provisions of limitation Act. He contended that making entries in Part-I RG-23A did not amount to taking credit and since the credit was taken only in Part-II subsequent to the amendment of Rule 57G, credit taken as such is clearly barred by time. 6. He submitted that taking credit on duty paid input is no doubt a vested right but it should be exercised within the period prescribed under the provisions of the Act and Rules. Prescribing time limit is only a procedural law and since the procedure was amended by Notification No. 28/95 dated 29-6-1995, it is only a declaratory or a procedural enactment which is held to be retrospective. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cause of action. The object of a statute of limitation is not to create any right but to prescribe periods within which legal proceedings may be instituted for enforcement of rights which exist under the substantive law. But, after expiry of the period of limitation, the right of suit comes to an end, therefore, if a particular right of action had become barred under an earlier Limitation Act, the right is not revived by a later Limitation Act even if it provides a larger period of limitation than that provided by the earlier Act. On the same principle, if right to execute a decree or judgment gets barred under an earlier Act, the right is not revived by a later Act. When the later Act provides a shorter period of limitation than that provided by the earlier Act, a right of suit, which is subsisting according to the earlier Act on the date when the later Act comes into operation, will not be taken to be extinguished. If there is still time even on the basis of the later Act within which such a suit can be filed, the right has to be availed of within that period, and the benefit of the earlier Act is not available. But if the shorter period provided in the later Act had already ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a declaratory Act is to set aside what Parliament deems to have been a judicial error and that declaratory Act usually contains a preamble and the word declared . This amendment dated 29-6-1995 is neither a declaratory nor a clarificatory in nature but a pure and simple amendment to the Rule 57G. 12. Next question arises for our consideration is whether amendment is retrospective. Tribunal in the case of Telco has categorically held that the amendment has no retrospective effect and cannot apply to situations which crystalised before 29-6-1995. There is force in the arguments advanced on behalf of the appellants that entitlement for Modvat credit for the said inputs had, therefore crystallised even before Rule 57G(2) was amended, since inputs have been received accompanied with the duty paid documents and the assessee had complied with other requirements like filing of declaration and making entries in Part-I of RG 23A. 13. When once it is accepted that taking Modvat credit is a right vested under statute and that statutory right so invested cannot be divested by any subsequent enactment unless the subsequently enacted statute expressly provides for the same. A statute wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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