ORDER
V.K. Ashtana, Member (T)
1. In these Revenue appeals against the Order-in-Appeal No. 169/97 dt. 7.9.1997 the short point for consideration is whether the credit taken by the respondents under the MODVAT Scheme six months after the receipt of the inputs on the certified copy of the gate pass as the original copy of the gate pass had been lost in transit is hit by limitation.
2. Heard Shri S. Kannan, learned DR and Shri Naseer Abdulla, learned Counsel for the respondents. The learned DR reiterates the grounds of appeal and submits that since the certified copy of the gate pass was produced after six months of the receipt of the material in the factory MODVAT credit was rightly rejected by the original authority and he cites the decision in the case of UOI v. Citadel Fine Pharmaceuticals as in wherein it was held that a period of six months would be considered as reasonable period of limitation.
3. The learned Counsel submits that the decision of the Supreme Court in the case of Citadel Fine Pharmaceuticals (supra) is on the question limited to the time involved under Rule 10 of the erstwhile Central Excise Rules. In this case, there is no duty demand involved, but on the contrary, credit has been denied. Therefore, the case law cited by the Revenue has no application to the impugned order. He further submits that the matter is covered by the decision in the case of Bhushan Steel & Strip Ltd. v. CCE as wherein it has been held that the six months restriction for taking MODVAT credit introduced by Notification No. 28/95-CE dated 26.9.1995 would not have retrospective effect. Therefore, credit should not be denied. He further cites the decision in the case of Tata Engg. Locomotive Co. v. CCE as in wherein similar decision has been given that the said amendment to Rule 57G(2) cannot be with retrospective effect. The learned Counsel submits that in the present case, the credit was taken much prior to the amendment to Rule in 1995. Therefore, credit has been rightly taken and there is no merit in the appeals of the Revenue. In this connection he also cites the Circular of the Board vide No. 275/109/96-CX dated 26.11.1996 wherein the original invoice has been lost has been considered and it was prescribed to the filed officers that in such cases, six months time limit would not be applicable at all. He submits that by this circular also, credit has been rightly taken.
4. On consideration of the submissions, I find that it is now well laid down that the six months limit for taking credit from the date of receipt of the goods in the assessee’s factory under Rule 57G(2) has to be computed only from the date of the amendment noted above and it does not have a retrospective effect. In this case, the credit has been undisputedly taken prior to the amendment. Therefore, the limit cannot be applied in this case.
5. In the grounds of appeal of the Revenue, they also stated that the limit of six months contained under Rule 571 should be applicable in this case. I am afraid. I cannot accept this position as this is not a case where the Revenue has demanded any duty short levied or Modvat credit erroneously taken. Only the recovery thereof would be covered by Rule 571. In this case, the issue involves Rule 57G which is totally a different set of circumstances. Therefore, I find that there is no merit on that ground also. In fact the decision of the Supreme Court in the case of Citadel Fine Pharmaceuticals (supra) the question of limitation under erstwhile Rule 10 of the CE Rules covers a situation where a demand is raised. Therefore, it has no applicability to the facts of this case.
6. In view of the above finding, I do not find any merits in the Revenue appeals which compels me to interfere with the order impugned. Hence the appeals are rejected.
(Dictated and pronounced in open Court).