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2016 (4) TMI 284 - PATNA HIGH COURT

2016 (4) TMI 284 - PATNA HIGH COURT - 2016 (336) E.L.T. 198 (Pat.) - Utilization of unutilized input credit amount - Manufacture of dutiable and exempted goods and had availed Modvat Credit in respect of inputs used - Held that:- it is evident that the non-utilization of the input credit were solely on account of the pending dispute between the parties which had arisen due to the failure of the Excise authorities to come up with a proper procedure in the matter of utilization of input credit cou .....

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e Revenue itself, on 1.3.1997 and thus the same was not at all in existence on 1.1.1997 when the respondents had opted out of the Modvat credit. In the circumstances, it is not at all open for the appellant to place reliance upon the said rule for denying the benefit of the input credit lying in the Account of the respondent on the basis of the said sub-rule. - Misc. Appeal No. 754 of 2010 - Dated:- 25-2-2016 - Ramesh Kumar Datta And Sudhir Singh, JJ. For the Appellant : Mrs. Nivedita Nirvikar, .....

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ent of duty. The respondent used to manufacture dutiable and exempted goods and had availed Modvat Credit in respect of inputs used. It was following the practice to debit the Modvatable credit every month in RG-23A Part-II register on pro-rata basis after taking into account the percentage of the value of dutiable footwear and exempted/export footwear cleared from the factory. The practice was being followed from 1.3.1987. A show cause notice dated 08.01.1992 was issued by the Collector of Cent .....

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and raised by the show cause notice dated 8.1.1992 and also imposing penalty of ₹ 2,00,000/-. The respondent was also directed to submit a detailed chart of stock of inputs, etc. The respondent aggrieved by the said order approached the Customs, Excise and Gold (Control) Appellate Tribunal, ERB, Kolkata which, by the order dated 20.04.1993, set aside the order of the Collector in so far as the duty and penalty was concerned and further directed the Collector to evolve a suitable method for .....

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93 upon which the respondent approached the authorities for allowing the utilization of input credit balance lying with it but the respondent was denied of its claim by Departmental letter dated 15.10.1993 on the ground that it should halt till finalization of procedure and such denial resulted in accumulation of input credit for which the respondent went on reminding the authorities by different letters requesting that a suitable procedure may be devised and a system may be finalized as early a .....

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again directing the respondent to reverse the credit, aggrieved by which the respondent filed an appeal before the Commissioner (Appeals) which was again disposed of by order dated 31.5.1996 remanding the matter to the Assistant Commissioner. The dispute continued with several rounds of litigation between the respondent and the Department with regard to utilization of the unutilized input credit amount and the determination of the mode and procedure in regard to determination of input credit, et .....

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after reversal of the said amount but that was also not allowed. Again on 06.02.2001 the respondent prayed for permission to allow transfer of unutilized credit to PLA since the refund had been denied. Upon refusal by the Department, a third round of litigation came before the Tribunal in appeal No. E-194/2000. which was dismissed on 22.8.2001 by the Tribunal holding that the respondent not being aggrieved by the direction for reversal of ₹ 24,82,488/-, he may claim for refund of unutiliz .....

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ns during its various stages and noting the stand of the Revenue that the restraint imposed by the jurisdictional Superintendent was automatically withdrawn/lifted in view of the Deputy Commissioner s order dated 12.1.2001, came to the conclusion that the Revenue could have very well resolved the matter in controversy as early as in 2002 without litigating the matter repeatedly. For the said reason, it held that the respondent had suffered on account of inaction of the Revenue and had earned inp .....

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57H (7) of the Central Excise Rules, 1944, the amounts would lapse and cannot be allowed to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export. Rule 57H (7) is in the following terms:- Rule 57H (7). A manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been availing of the credit of t .....

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red for home consumption or for export. Learned counsel for the respondent, on the other hand, submits that in view of the fact that on account of the restraint imposed by the appellant-authorities the respondent was unable to utilize input credit lying in the account, hence irrespective of the provisions of Rule 57 H(7), the respondent ought to have been allowed to avail input credit and for further accumulation of which they were not at all responsible and which issue was not resolved on accou .....

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