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Customs, Excise and Gold Tribunal – Delhi
C.C.E. Chandigarh vs M/S. Bakeman’S Industries Ltd. on 16 October, 2000


K.K. Bhatia, Member (T)

1. M/s. Bakeman’s Industries Ltd.(Soap Division), Bahadurgarh manufacture ‘soaps’ falling under Chapter sub-heading 3401.11 of the Schedule to the Central Excise Tariff Act, 1985. They were availing the benefit of money credit facility under Notfn. No.46/89-CE (NT) dated 11.10.89 on inputs viz., `Neem Oil’ and credit so availed was being utilised towards payment of Central Excise duty on their final product–‘soaps’ in terms of Rule 57-N of Central Excise Rules, 1944.

2. The Notfn. No.46/89-CE(NT) dt. 11.10.89 was rescined vide Notifn. No.16/96-CE(NT) dated 23.7.96 and consequently, the benefit of the money credit stood withdrawn with effect from this date. The party was however, having a balance of money credit amounting to Rs.7,76,99.17 unutilised on this date. Vide their letter dt.23.7.96 addressed to the Asst. Commissioner, they requested for permission to utilise the utilised credit which was rejected by the Asst. Commissioner vide his letter dt. 21.2.97. The party filed a Writ Petition CWP No. 2625 of 1997 in the Punjab & Haryana High Court. The Hon’ble High Court of Punjab & Haryana vide its Orde dt. 11.9.1997 held that the petitioner was entitled to the benefit as above and directed for consequent relied to the petitioners. The operative portion of the judgment of the High Court is extracted below:

“The High Court has also taken view, similar to the one taken by the Gujarat, Karnataka and Andhra Pradesh High Courts in ‘Amrit Vasnaspati Co. Ltd. vs. Union of India: 1990 (50) ELT 64 wherein it was contended that promissory estoppel shall apply for utilisation of the credit already earned. The Modvat Scheme had been withdrawn by the Government but the benefit of credit already accrued was held to be available for being utilised by the manufacturer”.

“Since this Court has already taken a view that the accumulated credit in respect of the excise duty paid on the raw materials could be utilised in respect of the excise duty payable by the manufacturer on the finished products, the present petition shall have to be allowed”.

“In the result, following the view taken by this court in ‘ Amrit Vanaspati Co. Ltd. vs. Union of India’ (supra), the present petition is allowed and the respondents are directed to permit the petitioner to utilise the credit already earned prior t the notification issued on July 23, 1996″.

3. Consequently, the Asst. Commissioner of Central Excise, Patiala Division also passed an Order dt. 25.11.97 in which he held; “The Hon’ble Court directed the respondents to utilise the credit already earned prior to the notification issued on July 23, 1996. Accordingly, I permit, M/s. Bakeman Industries Ltd. Soap Division, to utilise the credit of Rs.7,76,991.17 in respect of the earlier clearances made on their final product.

4. The Department filed an appeal against the above order of the Asst. Commissioner before Commissioner (Appeals), Chandigarh. The Commissioner (Appeals) in his Order dt. 25.11.97 relied on the judgment ofthe Hon’ble Supreme Court in the case of M/s. Dharampur Sugar Mills vs. CCE Meerut [1998 (102) ELT 509], in which it is held that rescinding of the scheme would not effect the rights already accrued to manufacture in utilising the same even after the lapse of the scheme and dismissed the appeal of the Department upholding the order passed by the lower authority.

5. The present appeal is against the above order of Commissioner (Appeals).I have heard Shri M.D. Singh, SDR for the appellants and Shri M.P. Dev Nath, Advocate for the respondents. It is contended in the Revenue appeal as follows:

“In case of U.O.I. & Other vs. Mahavir Vanaspati Co. in Civil Appeal No. 7438 & 7439 of 1996 (arising out of CWP No.14078 and 13260 of 1989) on the issue of withdrawal of money credit scheme, Pubjab& Haryana High Court’s Odder dt. 13.2.91 has been dismissed by the Hon’ble Supreme Court vide Order dated 15.7.977. The Punjab & Haryana High Court had held that the Notification withdrawing the benefit of credit on minor oils does not take away the right of the party to utilise the credit earned prior to the date of withdrawing of the scheme”.

6. In view of the above, it is argued that the order passed by Commissioner (Appeals) should be set aside and the appeal of the Revenue may be allowed. Shri M.P. Dev Nath, Advocate for the respondents on the other hand contended that the Order dt.11.9.97 passed by the Punjab & Haryana High Court is in their favour and hence the issue is settled in their favour. It is stated that once an issue is settled between the parties irrespective of the fact that on the same issue, the Apex Court decides in other way round, still the issue which is settle between these parties cannot be disturbed. Ld. Advocate for the respondents has relied on the following decision in support of his contention:

(i) M/s. Geep Industries Syndicate vs. CCE Allahabad–1997 (90) ELT 271 (S.C),

(ii) M/s. Kuil Fire Works Industries vs. CCE–1997 (95) ELT 3 (S.C), and

(iii) M/s. Agarwal Industries Ltd. vs. U.O.I.–1992 (57)ELT 561 (A.P).

The view held in this judgment of Andhra Pradesh High Court is confirmed by the Apex Court as reported in 1997 (95) ELT A277.

7. I have carefully considered the submissions made before m,e. It is a common ground that the Hon’ble Punjab & Haryana High Court vide their judgment dt. 11.7.97 on the Writ Petition filed by the present respondents had specifically allowed them to utilise the credit already earned prior to the issue of notification dt. 23.7.1996. This order of the High Court has attained finality qua appellants since the Revenue did not file an appeal against this order of the High Court. The fact that in another order passed by the same High Court on the issue, the Apex Court had taken contra view in itself could not be ground to not to follow the specific order of the High Court in that particular case. This view is supported by the ratio of the judgments cited before me by the ld. Advocate of the respondent (supra). Consequently, the Revenue appeal fails and the same is rejected upholding the order passed by the lower authorities.

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