ORDER
P.K. Desai, Member (J)
1. This appeal is directed against the Order-in-Appeal No. V. 2(34)235/91/3967 (SKD)/444/DN-VII/91/BII) dated 27-9-1991 of the Collector of Central Excise (Appeals), Bombay, confirming the Order-in-Original No. V-Adj(ADC)4-220/89/3532 dated 8-5-1991 of Assistant Collector of Central Excise, Div. VII, Bombay II, confirming the demand of Rs. 9979.78 from the appellants.
2. When the matter was called out, the Registry brought to my notice a letter from the appellants dated 20-8-1993 declaring that they were dispensing with the right of personal hearing and that the matter be decided on merits.
3. Heard Shri Ravinder Jain, the Ld JDR, for the Respondent Collector, who has referred to the statement of account and has submitted that the demand raised is in conformity with the statutory provisions.
4. Going through the records, it appears that the appellants were availing of Modvat Credit facility. However, they opted out of the same with effect from 1-4-1989. As per the provisions of Rule 57C of the Central Excise Rules, while opting out, and claiming exemption under Notification No. 175/86, they are required to reverse the credit availed of in respect of the inputs lying in stock, on the date they opt out of the Modvat Scheme. On this ground, enquiry was made and it was found that the appellants were liable to reverse the credit to the extent of Rs. 38,893.63 whereas they had reversed the credit to the extent of only Rs. 22,959.32 and paid Rs. 5954.53 by challan for the inputs used in the goods manufactured which were to be cleared subsequent to the opting out of the MODVAT Scheme on claiming exemption under another provision. The contention of the appellants is that whatever credit was lying in balance as on the date, they opted out of the MODVAT Scheme, was required to be reversed and that there was no justifiable ground to ask for the reversal of the credit or demand duty on the inputs which were lying unutilised on the same day. Going through the records, however, it appears that the demand is raised not for the purpose of claiming duty on the inputs lying unutilised. As per the provisions of Rule 57C whatever credit that is availed of for inputs lying in balance as on the date of opting out of the MODVAT, has to be reversed. Accordingly credit balance works out at Rs. 38,893.63 was required to be reversed and as against that the balance as shown in the RG 23A Part II was only Rs. 22,959.32. Thus there was a deficit to the extent of Rs. 14,934.31, out of which the appellants have paid Rs. 5954.53 by a separate challan and the balance of Rs. 9979.78 remains payable, which was demanded by issuing a Show Cause Notice and confirmed by the Order-in-original. The appellants’ contention that only such of the amount which was lying in balance on that particular day, was required to be reversed, cannot be accepted, as reversal has to be in relation to the credit availed of for the inputs which remain unutilised as on the date of opting out from the MODVAT Scheme. The amount worked out, therefore, appears to be justifiable and proper. The objection raised by the appellants does not appear to be sustainable, and in that case, there is no merit in the appeal. The appeal is therefore rejected.