ORDER
Jyoti Balasundaram, Member (J)
1. Revenue has filed the above Application for reference of the following questions of law stated to have arisen out of the Tribunal Final order Nos. A/216-217/99-NB, dated 9-4-1999 :-
In the case of Standard Sulphonators (P) Ltd.
1. Provisions of Notification No. 175/86 i.e., during the period in which clearances where effected at nil rate of duty no Modvat credit will be available, can be overridden by the Tribunal. In other words, whether simultaneous availment of Modvat credit and benefit of full exemption is permissible under the law.
2. The assessee can adopt their own procedure without any backing of the statutory rules i.e., Rule 57A read with 57G of Central Excise Rules, 1944 to reverse the credit, since reversal of credit availed on inputs used in manufacture of final product cleared without duty has no legal sanctity.
In the case of Universal Detergents
1. Provisions of Notification No. 175/86 i.e., during the period in which clearances were effected at nil rate of duty no Modvat credit will be available, can be overridden by the Tribunal. In other words, whether simultaneous availment of Modvat credit and benefit of full exemption is permissible under the law.
2. Accumulated Modvat credit of the last financial year can be carried over to next financial year when the party is not entitled for Modvat credit since the party was clearing the goods at nil rate of duty under Notification No. 175/86, dated 1-3-1986.
3. The assessee can adopt their own procedure without any backing of the statutory rules i.e., Rule 57G of Central Excise Rules, 1944 to reverse the credit, since reversal of credit availed on inputs used in manufacture of final product cleared without duty has no legal sanctity.
2. Brief facts leading up to the filing of the Reference Applications are that the assessees opted for availing of exemption of Rs. 20 lakhs as envisaged under Notification No. 175/86-C.E. and after exceeding the exemption limit they switched back to the Modvat credit under Rule 57A; but did not file a fresh declaration under Rule 57G. Modvat Credit was denied holding that the earlier declaration filed under Rule 57G of the Central Excise Rules was not sufficient, and that a fresh declaration was required to be filed under Rule 57G. Against the denial of the Modvat, the Assessees filed appeals to the Tribunal which were allowed holding that the declaration initially filed for the purpose of availing Modvat credit is sufficient and that the assessees are not required to file a fresh declaration on returning to the Modvat scheme after crossing the exemption limit prescribed in the SSI exemption Notification. The Tribunal followed its earlier decision in the case of Wox Coolers (P) Ltd., 1993 (63) E.L.T. 637, Standard Detergent, 1995 (76) E.L.T. 136 (T), Super Glass Works (P) Ltd., 1996 (83) E.L.T. 328.
3. Shri M.M. Dube, ld. D.R., brings to our notice a contrary view of the Tribunal in the case of Signs India v. C.C.E., Madras, 1996 (83) E.L.T. 665 (T) wherein the view expressed is that filing of fresh declaration is necessary in such situations. He, therefore, submits that since there is a divergent view and therefore it cannot be said that there is uniformity in the legal position the questions of law as framed by the Revenue may be referred to the Hon’ble High Court of Allahabad for its decision. This prayer is opposed by the Ld. Counsel who submits that the Tribunal’s decision in the case of Signs India (supra) per incuriam as it has not noted the earlier decision of the Tribunal taking a different view and he therefore contends that the Signs India decision should not be taken as a ground for allowing the Reference.
4. We have considered the submissions of the both the sides. Although several decisions of the Tribunal including the ones relied upon in the final order which has given rise to the present reference application have taken a particular view, namely that fresh declaration under Rule 57G of the Central Excise Rules is not required when the assessees come back to coverage of Modvat scheme after exceeding the ceiling limit of clearance prescribed in S.S.I. Notifications, the fact remains that one decision has taken different view and therefore it is in the fitness of things to refer the question of law arisen in this case to the High Court. We, therefore refer the following questions of law to the Hon’ble Allahabad High Court:
1. Whether a manufacturer who has initially filed a declaration under Rule 57G of the Central Excise Rules, 1944 for the purpose of availment of Modvat credit and who subsequently opt for exemption under Notification 175/86 and then comes back to Modvat facility is required to file fresh declaration under Rule 57G of the Rules.”
5. The Reference Application is hereby allowed.