TMI Blog1997 (1) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,97,243.15 paise by crediting the same in the petitioner's personal ledger account (hereinafter referred to as `the PLA') maintained under the Central Excise Rules. After the audio cassettes became exempt from excise duty it adjusted the PLA account by debiting the said sum of Rs. 1,97,243.15 paise on 28-6-1990 and 2-7-1990. It is claimed that later on the petitioner realised that there was no provision in the Central Excise Rules under which the credit of duty that was correctly taken under Rule 57G(2) and correctly utilised for the payment of duty under Rule 57F(3) could have been recovered. The petitioner, therefore, filed a refund claim for the said sum on 15-1-1991 contending that the said amount has been debited in PLA account by mistake and inasmuch as the deposit was without the authority of law. This claim was rejected by the Assistant Collector, Central Excise on the ground that the same was not maintainable on merits and was also barred by time under Section 11B. The petitioner filed an appeal to the Collector (Appeals) who dismissed the same by the impugned order dated 12-8-1994 on the ground of limitation only. It is claimed that the credit for duty paid on inputs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (Modified Value Added Tax). In brief, it may be said that when a manufacturer purchases such inputs on which excise duty has been paid he can credit according to rules the amount of excise duty paid on those inputs and when he removes the manufactured goods the excise duty payable will be debited in the said account. The net result will, therefore, be that infact the manufacturer pays the excise duty on the final product as reduced by the excise duty paid on the inputs. The detailed procedure is provided in Rules 57A to 57G. The relevant part of Rule 57A is as below :- "The provisions of this section shall apply to such finished excisable goods (hereinafter referred to as the "final products"), as the Central Government may, by notification in the official Gazette, specify in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the `specified duty') paid on the goods used in or in relation to the manufacture of the said final products (hereinafter referred to as the "inputs") and for utilising the credit s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Central Excise within five days after the close of each month documents evidencing the payment of duty along with extracts of Parts I and II of form RG 23A. Rule 57-I provides for recovery of credit wrongly availed of where credit of duty on inputs has been taken on account of an error, omission or mis-construction, on the part of an officer or a manufacturer. 8.Section 11B of the Central Excise and Salt Act, 1944 deals with claim for refund of duty. It provides that a person claiming refund of any duty of excise may make an application for refund before the expiry of six months from the relevant date. The explanation to Section 11B defines relevant date and in the case of the present petitioner the relevant date is the date of payment of duty which admittedly, were 28-6-1990 and 2-7-1990 on which date the petitioner claims to have paid the duty in respect of the inputs by debiting the PLA account, although earlier he had taken the credit therefore. Admittedly, the claim for refund of the said amount of Rs. 1,97,243.15 paise was made on 15-1-1991 i.e. after the expiry of six months. It is for this reason that the Assistant Collector and the Collector (Appeals) held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the credit the debit entry was wrong.This approach in my view is not supported by the rules as mentioned above. 10.As is evident, entries in PLA account and other documents are at times provisional in nature and become final after certain events take place. For example a personal ledger account is commenced with a credit entry represented by a cash deposit in the treasury as required under Rule 9. When the first deposit is made in the treasury there is no payment of any excise duty. The deposit and the corresponding credit in the PLA account is only a provision for making payments of excise duty on the goods that are manufactured and are to be removed. Therefore, when a person makes the cash deposit in the treasury he does not actually pay excise duty he only makes a provision for the payment thereof and the actual excise duty stands paid only when it becomes payable in accordance with the Act and the Rules. Rule 57A clearly shows that Modvat credit is available for utilising the credit so allowed towards payment of excise duty leviable on the final products. Therefore, there can be no finalised credit unless the inputs are used in accordance with Rules 57A and 57F and eith ..... X X X X Extracts X X X X X X X X Extracts X X X X
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