TMI Blog2011 (3) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents are restrained from enforcing any demand pursuant to the order of CEGAT in Appeal Nos. E/1487, 1577, 1377/97-Mum., dated 23rd November, 2001. - Special Civil Application No. 9913 of 2002 - - - Dated:- 14-3-2011 - Harsha Devani and H.B. Antani, JJ. Shri Mihir H. Joshi, for the Petitioner. Shri D.N. Patel and Gaurang H. Bhatt, for the Respondent. JUDGMENT By this petition under Article 226 of the Constitution of India, the petitioner has challenged Central Excise Notification No. 16/94-(N.T.), dated 30th March, 1994 to the extent it provides that on the basis of the documents stipulated therein, credit under Rule 57G of the Central Excise Rules, 1944 (the Rules) has to be taken on or before 30th June, 1994. The petitioner has also challenged order dated 23rd November, 2001 passed by the Central Excise and Gold (Control) Appellate Tribunal (The Tribunal). 2. The petitioner, a limited company, is engaged inter alia in the manufacture of artificial filament yarn/partially oriented yarn falling under Chapter 54 of the Central Excise Tariff Act, 1985. The petitioner availed of Modvat credit in respect of corrugated boxes/heat transfer oil by making necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., 2001 (42) R.L.T. 475. The petitioner thereafter moved an application for rectification of mistake before the Tribunal contending that the decision of the Gujarat High Court in the case of Gujarat Commissioner of Central Excise, Ahmedabad v. Gujarat Medicraft Pvt. Ltd. (supra) related to endorsed gate passes while in the present case the gate passes were received directly from the supplier/manufacturer. The application came to be turned down by the Tribunal vide order dated 4th July, 2002 holding that the Tribunal s final order was based on the decision of the Larger Bench in the case of Montari Industries Ltd. v. Commissioner of Central Excise and Customs, hence, no mistake had arisen from the final order. Being aggrieved, the petitioner has approached this Court seeking the reliefs noted hereinabove. 4. Mr. Mihir Joshi, learned senior advocate appearing on behalf of the petitioner invited attention to the provisions of Rule 57G of the Rules and more particularly to the proviso thereto which provides that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice issued under Rule 52A, an A.R.1 or triplicate copy of a Bill of Entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 (106) E.L.T. 3 (S.C.), for the proposition that provision for facility of credit is as good as tax paid till tax is adjusted on future goods on the basis of several commitments which would have been made by the assessees concerned. 4.2 Reliance was placed upon the decision of the Supreme Court in the case of Sales Tax Officer Ponkunnam and Another v. K.I. Abraham, AIR 1967 SC 1823, wherein the Court in the context of Section 8(4) of the Central Sales Tax Act, 1956 which held that the phrase in the prescribed manner in Section 8(4) does not take in the time element. In other words, the section does not authorise the rule making authority to prescribe a time-limit within which the declaration is to be filed by the registered dealer. It was accordingly submitted that the Central Government is empowered to prescribe the documents evidencing payment of duty but there is no authority to prescribe a time-limit within which a credit can be taken. Reliance was also placed upon the decision of the Supreme Court in the case of M/s. Bharat Barrels and Drum Manufacturing Company Ltd. and Another v. Employees State Insurance Corporation, 1971 (2) SCC 860, for a similar proposition of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th March, 1994 according to which a manufacturer could avail of Modvat credit on the basis of gate passes issued prior to 31st March, 1994 subject to the condition that credit is taken before 30th June, 1994. In the present case, the gate passes were issued before 31st March, 1994 and the goods were received in the factory on various dates from 26th March, 1994 to 1st April, 1994 and entry was made in the RG-23A Register Part I on the same date. However, due to oversight on the part of the petitioner, credit was taken in the RG-23A Register Part II only on 2nd August, 1994. In view of the fact that credit had been taken after 30th June, 1994, proceedings were initiated against the petitioner which culminated into a demand of ₹ 44,712/- along with penalty of ₹ 500/-. The petitioner failed before the Commissioner (Appeals) as well as before the Tribunal. As can be seen from the impugned order of the Tribunal, the Tribunal has not discussed the merits of the case but has dismissed the appeal by placing reliance upon the decision of the Larger Bench of the Tribunal in the case of M/s. Montari Industries Ltd. v. CCE, Chandigarh as well as the decision of this High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are received in the factory under the cover of an invoice, issued under Rule 52A, an AR-1, or triplicate copy of a Bill of Entry, a certificate issued by an Appraiser of Customs posted in Foreign Post Office or any other document as may be prescribed by the Central Government by notification in the Official Gazette in this behalf evidencing the payment of duty on such inputs. The subject notification has been issued in exercise of powers conferred by the first proviso to Rule 57G of the Rules which provides for prescription of any other document evidencing the payment of duty on such inputs as may be prescribed by the Central Government by notification in the Official Gazette. Thus, from the language employed in the provision, it is apparent that the Central Government is empowered to prescribe any other document in addition to the documents prescribed under the said rule evidencing the payment of duty on such inputs. However, the said power is limited to prescribing any other document in addition to the documents prescribed and does not extend to prescribing a time-limit within which credit has to be taken. In other words, once such documents are prescribed, there is no furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e credit taken is to be availed, in effect and substance the said notification provides for lapsing of the credit that has already accrued in favour of the petitioner. In this regard it may be noted that the petition pertains to credit taken in the year 1994. At the relevant time there was no provision in the Act empowering the Central Government to frame rules providing for lapsing of credit of duty. Clause (xxviii) of sub-section (2) of Section 37 of the Act, which empowers the Central Government to frame rules providing for lapsing of credit has been inserted with retrospective effect from 16th March, 1995. Hence, the said provision would not be applicable to the facts of the present case. In the circumstances, apart from the fact that Rule 57G of the Act does not empower the Central Government to prescribe a time-limit for taking credit, at the relevant time the Central Government was not empowered to frame a rule providing for lapsing of the credit taken. Hence, the present case would be squarely covered by the decisions of the Supreme Court in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd, (supra) and in the case of Eicher Motors Ltd. v. Union of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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