ORDER
Jyoti Balasundaram, Member (J)
1. A duty demand of Rs. 3,23,806/- has been confirmed against the appellants herein on the ground that this amount was utilised as money credit on ethyl alcohol subsequent to 1-4-1994 which is the date on which money credit scheme came to an end by rescinding of Notification 10/94, dated 1-3-1994 (which came into force on 1-4-1994) which rescinded Notification 231/87, dated 1-10-1987, There was no dispute about credit taken prior to that date. The argument of Shri A.N. Haksar, learned Senior Counsel who appeared along with Shri R. Sudhinder, learned Advocate is that the entries in the RG 23B Part II entry book of duty credit were made on 29-3-1994, 30-3-1994 and 31-3-1994 i.e. before 1-4-1994 and hence the credit which had been earned by the appellants before 1-4-1994 could not be denied to them on the ground that Notification 231/87 had been rescinded w.e.f. 1-4-1994. His alternate submission is that even assuming without admitting that entries Nos. 575,576 and 577 had been made on or after 1-4-1994, this would not materially alter the right of the appellants to avail of the credit on the ethyl alcohol because of the undisputed position that ethyl alcohol on which the credit was taken, was received in the factory of the appellants prior to 1-4-1994 as evidenced by GP1s issued by the State Excise Authorities (pages 18 to 20 of the paper book) dated 29th, 30th and 31st March, 1994. He further submits that the penalty of Rs. 1 lakh imposed by the adjudicating authority for contravention of Rule 173Q(1) (PP) of the Central Excise Rules is also not warranted because the appellants were not getting any undue advantage by making the entries on or after 1-4-1994 instead of on 29th, 30th and 31st March, 1994, as they were entitled to credit since the goods had been received before 1-4-1994. He, therefore, submits that the duty demand and penalty are required to be set aside.
2. Learned DR, Shri Kilania refers to the detailed findings of the Collector of Central Excise in the impugned order and in particular to paragraph 13 wherein the Collector has noted that after Sl. No. 574 at page 46 of the RG 23B Part II Register, entries at Sl. Nos. 575, 576, 577 and 578 have been made at page 47 which entries were not available when the Sector Officer/Inspector In-charge made the remark “Scheme of money credit is wound up w.e.f. 1-4-1994. Hence the balance of money credit not to be used until further instructions received from the Divisional Office”. It is on this basis the adjudicating authority has held that once the Inspector made this remark on 1-4-1994 at a time when the credit of Rs. 3,23,806/- was not in the balance of the appellants, it is established that the entries in respect of this amount were made after the Inspector’s remark dated 1-4-1994 i.e. after Notification 231/87 had been rescinded. Learned DR submits that since the assesses made false entries in the RG 23B Part II Register, the Collector has rightly imposed the penalty. He submits that the entire order of confirmation of duty and imposition of penalty is correct in law and prays that the appeal of the appellants may be dismissed.
3. Heard both sides. I find that in this case the stand of the appellants right from the stage of reply to the show cause notice has been two fold (i) that the entries at Sl. Nos. 575 to 577 were made on 29th, 30th and 31st March, 1994 and not on or after 1-4-1994; (ii) that in any event the ethyl alcohol on which credit had been availed was received by the appellants on 29th, 30th and 31st March, 1994 under cover of State Excise gate passes. The Department has not been able to rebut this categoric assertion of receipt of ethyl alcohol before 1-4-1994 which is backed by relevant State Excise documents. Therefore, I agree with the learned Counsel for the appellants that since credit accrues on goods and the goods in question have been received before the rescinding of the money credit scheme, the appellants were entitled to the same even though the scheme was rescinded w.e.f. 1-4-1994. My view is supported by the decision of the Hon’ble Supreme Court in the case of Union of India v. Deepak Vegetable Oil Industries Ltd.. The SLP filed by the revenue to the Supreme Court against the judgment of the Hon’ble Gujarat High Court referred to in the order-in-original was dismissed on 28-10-1990. The Supreme Court judgment has been followed by the Tribunal in the appellants’ own case as seen from final order No. A/1114/94-NB, dated 30-12-1994 wherein the Tribunal has held that the effect of rescinding Notification regarding money credit scheme is that the manufacturers would not be entitled to earn any credit after the date of recession. But that would not affect the rights already accrued to them by way of credit and it is open to the manufacturers to utilise the same even after the lapse of the Notification. Following the ratio of the above orders, I hold that credit of Rs. 3,23,806/- has rightly been availed as money credit by the appellants on ethyl alcohol received by them prior to 1-4-1994 and accordingly set aside the demand of duty and penalty in the impugned order.