ORDER
Jyoti Balasundaram, Member (J)
1. For reasons recorded below we waived the pre-de-posit of duty of Rs. 47,040/- and stayed its recovery and stayed the operation of the order relating to dis-allowance of Rs. 9,94,007.50 (P) being the credit availed of by the appellants during the period from 25.8.1989 to 31.8.1989 and proceeded to hear the appeal itself, with the consent of both sides.
2. The brief facts of the case are as follows:
The appellants are engaged in the manufacture of Vegetable Product falling under Tariff item 1504.00 i.e., Vanaspati and were availing the credit of money for use of minor oils in payment of duty of finished products as per Notification No. 27/87-CE dated 1.3.1987, which was rescinded on 25.8.1989 by Notification No. 39/89-CE-NT dated 25.8.1989. Immediately on receipt of the instructions on 12.9.1989 regarding withdrawal of concession the Appellants stopped utilising the credit accumulated in the RG-23B Part II under Notification 27/87-CE(NT) for the part payment of duly on clearance of Vanaspati. On 6.10.1989 Demand show cause notice for Rs. 47,040/-, and disallowance of credit taken of Rs. 9,94,997.50 P was issued pertaining to the period 25.8.1989 to 31.8.1989 on the ground that taking of and utilisation of credit was irregular and inadmissible. The Asslt. Collector disallowed the credit taken by the appellant during the period in dispute and confirmed a demand of Rs. 47,040/- in respect of wrong utilization during the same period. The lower appellate authority upheld the order of the Asstt. Collector and hence this appeal.
3. We have heard Shri M.A. Rangaswamy, learned Advocate and Shri V.K. Sharma, learned SDR and perused the records including the letter of 4.2.1993 from the Finance Ministry to the learned CDR. The issue is no longer res integra in view of the judgment of the Hon’ble Gujarat High Court in the case of Dipak Vegetable Oil Industries Ltd. v. Union of India wherein it has been held that a right conferred by a rule could not have been taken away by the Government by merely rescinding the notification which had brought the said right into existence, and therefore, even after notification 27/87, and 40/87 were rescinded with effect from 25.8.1989, the credit of money earned by the manufacturers of Vanaspati and Soap could be utilised by them in terms of the rules and notification for payment of excise duty on Vanaspati and Soap manufactured after that date. The special leave petition against the High Court’s judgment was dismissed by the Supreme Court by its order dated 8.10.1990. Thus the High Court order has been confirmed by the Supreme Court. Further the Ministry has instructed the Central Excise Department through its representative not to oppose the appeal filed by the appellant. The letter is reproduced below:
F. NO.390/16/93-JC
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
(JUDICIAL CELL)New Delhi, the 4th February, 1993
To
Smt. Vijay Zutshi,
Chief Departmental Representative,
CEGAT, West Block No. II,
R.K. Puram, New Delhi-110 066.
Madam,
Sub: Dispute between M/s. Hindustan
Vegetable Oils Corpn. and
Central Excise Deptt. -Reg.
The undersigned is directed to invite a reference to the dispute between M/s. Hindustan Vegetable Oils Corpn. Ltd. and the Central Excise Deptt. relating to the utilization of credit availed in respect of minor oils under Notfn. No. 27/87-CE dated 1.3,1987.
2. M/s. Hindustan Vegetable Oils Corpn. being a Public Sector Undertaking under the Ministry of Food and Civil Supplies, took up the matter with the Committee of Secretaries under the Cabinet Secretariat for settlement of the dispute. In the meeting of the Committee of Secretaries held on 29.12.1992, the following decision was taken:
2.3 CBEC. agreed that there is merit in the contentions of HVOC. Considering, however, that the Central Board of Excise and Customs cannot review or modify decisions taken by the Assessing and Appellate authorities who have been vested with the statutory quasi-judicial powers, the Board would not have any objection if HVOC is allowed to agitate their case before CEGAT for appropriate relief. It was agreed that in the event of an appeal by the HVOC before CEGAT, the Department of Revenue would not, oppose the appeal as also the application for condonation of the ‘limitation period’ when it is taken up for hearing. HVOC may therefore be allowed to go in appeal to CEGAT.
3. Accordingly, you are requested not to oppose the appeal filed by HVOC against order-in-appeal No. 9/CE/KNP/90 dated 19.11.1990 passed by the Collector of Central Excise (Appeals), Allahabad. This order-in-appeal arose from order-in-original No. 81/ACK.-II/89-90 dated 2.3.1990 passed by the Asstt. Collector of Central Excise, Division-II, Kanpur, wherein demand amounting to Rs. 3.09 lakhs approximately for the period 1.9.1989 to 12.9.1989 was confirmed.
4. Further, you are also requested not to oppose the appeal and application for condonation of delay filed before CEGAT by M/s. Hindustan Vegetable Oils Corpn. against order-in-appeal No. 210-A/CE/KNP/92 dated 8.9.1992 passed by the Collector (Appeals) Allahabad. This order-in -appeal arose from order-in-original No. 58-ACK-II/91-92 dated 19.7.1991 passed by the Asstt. Collector of Central Excise, Division-II, Kanpur wherein a demand amounting to Rs. 10.41 lakhs approximately for the period 25.8.1989 to 31.8.1989 was confirmed.
Yours faithfully,
Sd/-
(J.P. Singh)
Under Secretary to the Govt. of India
Copy to:
1. Smt. Nisha Malhotra, Collector of Central Excise, Kanpur: for infonnation and necessary action.
2. Shri R.K. Singh, Under Secretary, Ministry of Civil Supplies, Consumer Affairs and Public Distribution, Krishi Bhavan, New Delhi for information with reference to his letter No. 18/15/92-EOP dated 22.1,1993.
Sd/-
(J.P. Singh)
Under Secretary to the Govt. of India
4. In the light of what is set out above, we set aside the impugned order and allow the appeal with consequential relief to the appellant.