ORDER
K.S. Venkataramani, Vice President
1. The appellants manufacture unmachined/machined castings falling under Chapter 73 of the Central Excise Tariff. On 31-7-1991, they prepared two Gate Passes and debited Rs. 4,026/- in RG 23A Part II credit account and another Rs. 295/- in their PLA. However, due to non availability of the transport, both the Gate Passes were cancelled, about which they sent intimation to the Central Excise Range Supdt. and then they also took credit of the amount of duty debited against these two gate passes amounting to Rs. 4,321/- both in the PLA and RG 23A Part II registers. Proceedings were initiated against them by issue of show cause notice. It was alleged that there is no provision in the Central Excise Rules for taking credit in RG 23A Part II against cancelled Gate Passes and that therefore, the credit taken by the appellant was irregular. The jurisdictional Asstt. Commissioner of Central Excise, Divn. II, Nagpur passed the adjudication order on 28-2-1991 disallowing the credit of Rs. 4,026/- which they had availed of in the RG 23A Part II. The Asstt. Commissioner observed that as per Rule 173G(2) (vii), where the assessee after he had debited the duty due on the goods in PLA finds it necessary to cancel any gate pass, he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day of the cancellation of the gate pass and may thereupon take the credit of duty in that account. Therefore, it was held that the appellants were not entitled to take credit of duty in their RG 23A Part II account. The Commissioner (Appeals) upheld the Asstt. Commissioner’s order and it was held that in the absence of any specific provision for taking recredit in RG 23A Part II, the appellants cannot take the credit on their own.
2. Shri Anthony Mathias, Dy. Manager of the appellants submitted that the admitted position is that there is no prescribed procedure for recredit in RG 23A Part II account of any amount debited therein on cancellation of gate passes. In such a situation, it cannot be held against the appellants that they have taken credit on their own. Reliance was placed on the Tribunal decision in the case of Collector of C.C.E. v. Wipro Information Technology -1988 (33) E.L.T. 172 (Tribunal) wherein the Tribunal had observed that in such a situation where the assessee was acting in good faith and where what he did was not at the time he did it illegal, any action which would impose a liability on him should be something clearly authorised by law.
3. Shri Ramtake, the ld. DR for the Revenue, however, pointed out that provisions in Rule 173G (2) is specific only for covering the situation of cancellation of gate pass and consequential credit in PLA and there is no such corresponding provision for taking credit in RG 23 Part II.
4. The submissions made have been duly considered. The objection in this case is only regarding the credit of duty taken in the RG 23A Part II by the appellants on cancellation of gate passes. The duty involved in the gate pass is paid by partly debitting the PLA and by partly debitting their RG 23A Part II. No objection has been taken for the credit taken in PLA because the situation is specifically covered by provisions of Rule 173G(2)(vii). However, it is seen in that Rule 173G(1) does refer besides the account in PLA also the account in Form RG 23, where the assessee is availing of the procedure under Rule 173K. Rule 173K lays down – in relation to the excisable goods covered by Chapter VIIA, the provisions of Rule 56A shall apply with few modifications. The Collector (Appeals) in his order observed that the reference in the Rule is only to RG 23 account and not RG 23 account and therefore, the present case will not be covered by the wording of Rule 173G(1). However, it is to be noted that even in respect of the account RG 23 maintained for proforma credit purposes as well as Modvat credit purposes under RG 23A, situations are envisaged where adjustment in the credit amount have to be made as in the case, when there is variation in the credit taken. Such variations are to be made by adjustment in the credit account and both Rules relating to proforma credit and those governing Modvat credit provided for this. Rule 57E in respect of Modvat credit is relevant. Therefore, what has occurred in a situation as in the present case is analogous to such an adjustment in the credit account in RG 23A Part II, and for this purpose it is also relevant that the appellants have given the intimation about the cancellation of the Gate Passes as a consequences of which the necessity for taking credit arose. As noted, so far as PLA is concerned, the Rules specifically provided for it. In the case of duty paid by debitting RG 23A Part II, harmonious reading of the provisions as above will not militate against allowing such a facility by adjustment in the Modvat credit. In the circumstances, there is substance in the contention of the appellants that in the absence of the specific provision providing for the situation in the statute, the same cannot be interpreted against the assessee. Therefore, on the facts and in the circumstances of the case, the appellants are eligible to take credit of the disputed amount in their RG 23A Part II account. The appeal is, therefore, allowed.