ORDER
G.A. Brahma Deva, Member (J)
1. This reference application is filed by the party to refer the following questions on the ground that the point of law arises with reference to the Tribunal Final Order No. 1195/1999, dated 14-5-99 –
(a) Whether the Tribunal was right in holding that Modvat credit properly availed after complying with all the procedural requirements on dutiable final products, needs to disallowed when the final products, get subsequently exempted by notification issued under Section 5A of Central Excise Act, 1944 ?
(b) Whether the Tribunal was correct in following the decision of the Single Judge of the Allahabad High Court in Super Cassettes Industries Ltd. v. Union of India -1997 (94) E.L.T. 302 when the issue was covered by a decision of the Division Bench of Delhi High Court in Good Year India Ltd. v. Union of India -1990 (49) E.L.T. 39.
2. Shri B.V. Sankaranarayana Rao, learned Advocate appearing for the applicants submitted that the questions of law arises since the view taken by the Tribunal to contrary to the decision of the Delhi High Court in the case of Good Year India Ltd. reported in 1990 (49) E.L.T. 39. In support of his contention he referred to Para 30 of the said order which reads as under –
Para 30 : “In fact, the scheme provides that the credit can be utilized for payment of duty, against any excisable products, that are brought from the factory. No debit can claimed after the credit has been taken on goods brought into the factory. Once raw materials enter the factory of petitioner company, credit is to be taken in accordance with the procedure, prescribed in the Rules, without any correlation to the end product. The credit can be utilized by petitioner, for the payment of duty on any goods, for which credit is taken. These goods need not be exempted goods, but will be those goods, on which duty is payable under the Act.”
3. Shri Narasimha Murthy, JDR appearing for the Revenue submitted that the decision of the Delhi High Court referred to above by the other side was in different context and the same is not applicable to the facts of this case. Further more the said decision was not cited before the Tribunal at the time of hearing the matter. The Tribunal has followed the Larger Bench decision of the Tribunal in the case of Khanbhai Esoofbhai and Ors. v. CCE, Calcutta and Ors. reported in 1999 (107) E.L.T. 557 (Tri. – LB) = 1999 (30) RLT 519 CEGAT while deciding the issue. In turn the Larger Bench has relied upon the decision of the Allahabad High Court in arriving at the decision apart from referring to the various decisions. He submitted that since that was the correct position at the time of passing the order, no question of law arises and there was no necessity to refer the question for further consideration.
4. Shri Sankaranarayana Rao said that subsequent to the decision of the Larger Bench, the Supreme Court has taken a different view in the case of Dai Ichi Karkaria Ltd. reported in 1999 (112) E.L.T. 353 (S.C.). In that case, the Supreme Court has taken the view that –
“the credit availed and utilised during the period when final products dutiable – Credit not be reversed when subsequently final product exempted from duty, credit having been taken validly and its benefit being available to manufacturer without any limitation in time.”
He said that this view of the Supreme Court was followed by the Tribunal by subsequent Larger Bench in the case of Commissioner of Central Excise, Rajkot v. Ashok Iron & Steel Fabricators reported in 2002 (140) E.L.T. 277 (Tri. – LB). In that case it was also observed that the matter need not go before 7 Members Bench in spite of the decision of the Larger Bench of the Tribunal in Khanbhai Esoofbhai
v. Collector of Central Excise, Calcutta reported in 1999 (107) E.L.T. 557 (Tribunal – LB). He submitted that the view taken by the Larger Bench decision in the case of Khanbhai Esoofbhai was not well received as can be seen from the respective order. Hence, the questions of law arises with reference to the Tribunal final order and the matter may be referred to the High Court for its consideration.
5. I have carefully considered the matter. On going through the respective submissions and the case law referred to above, I find that the Tribunal has passed the final order following the view taken by the Larger Bench of the Tribunal. The Larger Bench in turn has followed the decision of the Allahabad High Court in arriving at the conclusion. It was brought to my notice that decision of the Supreme Court in the case of Dai Ichi Karkaria Ltd. referred to above was subsequent to the decision of the Larger Bench. It was also argued by the DR that since the Tribunal has passed the order based upon the law as it stood at the relevant point of time, there was no necessity to refer the questions to the High Court. I also find force in the arguments advanced on behalf of the Revenue that subsequent decision of the Supreme Court or High Court or of a Tribunal is not to form a base for rectifying the mistakes in terms of Section 35C(2) of the Central Excise Act 1964, relying upon the decision of the Larger Bench in the case of Gujarat Steel and Chem. Ltd. v. Commissioner, Central Excise, Vadodara reported in 2000 (122) E.L.T. 282. It was further argued that on the same analogy subsequent decision of the Supreme Court is not a ground to refer the matter to the High Court for its considered opinion. Concurring with the pleas taken by the Revenue, I do not find any force in the pleas taken by the party to refer the questions of law to the High Court on the ground that the point of law arises with reference to the final order. In the result, reference application is rejected. Ordered accordingly.