ORDER
Archana Wadhwa, Member (J)
1. After dispensing with the condition of pre-deposit of duty, we take up the appeal itself for final disposal in as much as the issue is covered in favour of the appellants by the earlier decision of the Tribunal. The short point involved as to whether the appellants are liable to pay the Modvat credit availed by them in respect of the inputs which were lying unutilized in stock as on 1.8.97 when there was a switch over to compounded levy scheme. There is no dispute that the Modvat credit lying in the appellant’s accounts should lapse on the said date. The dispute is only in respect of the inputs lying in stock, on which the appellants had taken the credit, which was utilised for payment of duty on their final product.
2. We find that the Tribunal in the case of M/s. Shilpa Rerollers Ltd. and Others Order No. C-III-716 to 729/WZB/2003 dated 17.4.2003 has held that the credit already availed and utilised in respect of the inputs lying in balance as on 1.8.97 is not required to be reversed. For better appreciation we re-produce para 6 of the said order.
“After hearing rival submissions and perusal of case records, we find that when the scheme of charging duty on the basis of annual production was introduced and consequently the impugned finished goods and inputs were taken out of the modvat scheme, a specific amendment was made in the modvat rules for the credit lying in balance on 1.8.1997 to lapse. However, no specific provision was made in the rules requiring payment of duty on inputs lying in stock in respect of which credit was taken. It should have been envisaged by the rule making authority that different manufacturers would have diferent amount of unutilized credits and different quantities of unultized inputs in stock on the date that changeover was made. Some manufactures might have utilized more of the credit and some others might have utilised more of the inputs. equity considerations required providing for payment of duty on the unutilized inputs on which credit was taken and utilized. However, when the rule makers have not provided for a specific provision in regard to payment of duty on such unitilised inputs, the authorities below can not demand duty as if such a provision has been made. No doubt, manufacturers who have taken credit of the input duties and utilized the same for payment of duty on finished goods made earlier but have a large stock of inputs lying in stock would obtain an unintended monitary advantage. But in the absence of a specific rule made to address such a situation arising at the time of change over, we have no option but to hold that the duty on such inputs can not be demanded. The decisions cited by the learned Jt. C.D.R. are of no help as they deal with instances where final products became exempt which is not the case here.
In is much as the issue is settled, we set aside the impugned order and allow the appeal with consequential relief to the appellants. The stay petition also stands disposed off.