ORDER
K. Sreedharan, J. (President)
1. This is an application for referring the following questions for decision by the Hon’ble Supreme Court :-
“(i) Whether Rule 57-1 as it stood prior to the amendment effected on 6-10-1988 is subject to the provisions of limitation prescribed under Section 11A? or
(ii) Whether it is independent of Section 11A and can be invoked for recovery of Modvat even covering the period beyond six months from the date of credit ?”
2. Revenue has stated in this reference application that the above mentioned two questions have already been referred to the Hon’ble Supreme Court while allowing reference application No. 34/95-NRB, dated 4-8-1995 in the case of Commissioner of Central Excise, Jaipur v. Raghuvar (India) under Section 35H of the Central Excise Act, 1944.
3. Brief facts of the case in which the above questions arise for decision are as follows.
4. Respondent, M/s. Rasan Detergents Pvt. Ltd. are engaged in the manufacture of soap and detergent cakes. According to the department, respondent availed Modvat credit of Rs. 3403.52 on cream wove paper which was received from M/s. Orient Paper Mills through M/s. Laxmi Traders, New Delhi, as an input for packing the produce. The paper so received was sent to M/s. Rajpura Priston, Rajpura for job work and received it back as printed packing material (wrapper). This procedure was not permissible, because Modvat on packing material is admissible only if the same is brought to the factory in a ready to use condition. Adjudicating authority by order-in-original No. 84/C.E./D/86, dated 21-11-1986 confirmed the demand on the ground that Modvat was not available, since no duty had been paid on the packaging material. As regards the question of limitation, the authority took the stand that Rule 57-1 does not prescribe any period of limitation. Aggrieved by the order of the adjudicating authority, respondent took up the matter in appeal. Commissioner (Appeals) rejected the same as per order-in-appeal No. 1561/C.E./CHD/1991, dated 19-9-1991. Respondent took up the matter in appeal before this Tribunal. By final order No. A/919/1995-NB, dated 27-10-1995 this Tribunal allowed the appeal holding that the demand is barred by limitation as the credit was taken on 17-8-1987 and show cause notice was issued on 3-8-1988. According to this Tribunal, Rule 57-1 is controlled by the period of limitation prescribed by Section 11A of the Act.
5. This reference application was heard by a learned single Member on 22-2-1996. He noticed the views expressed by two High Courts regarding the applicability of period of limitation prescribed by Section 11A of the Act to proceedings governed by Rule 57-1 of the Rules. They are Torrent Laboratories Pvt. Ltd. v. Union of India, 1991 (55) E.L.T. 25 (Guj.) decided by the Gujarat High Court and Zenith Tin Works Pvt. Ltd. v. Union of India and Ors. reported in 1986 (23) E.L.T. 357 decided by the Bombay High Court. In the second case, it is contended that Bombay High Court was dealing with a case falling under Rule 56A and did not relate to the Modvat scheme coming under Rule 57-1. Learned Member also noticed the divergent views expressed by the High Court of Karnataka in Tungabhadra Steel Products Ltd. v. Superintendent of Central Excise reported in 1991 (56) E.L.T. 340. Thereafter, the learned Member took note of the fact that identical questions have been referred to the President for further reference to the Hon’ble Supreme Court by the West Regional Bench in the case of Collector of Central Excise v. Maradi Steel Pvt. Ltd. reported in 1992 (59) E.L.T. 59. After expressing the view that the questions raised are to be referred to the Supreme Court, learned Member placed that matter before the President for placing it before a Larger Bench. Thus, the matter has come up before us.
6. The fact that identical questions have been referred for decision by the Hon’ble Supreme Court as contemplated by Section 35H of the Act is not in dispute. Parties have not brought to our notice the decision of the Supreme Court on the above questions referred. Therefore, we refer the questions mentioned earlier for decision by the Hon’ble Supreme Court under Section 35H of the Central Excise Act, 1944. Office will forward the reference to the Hon’ble Supreme Court as provided by Section 35H of the Act without delay.