ORDER
V.P. Gulati, Member (T)
1. This reference application arises out of the order of the Tribunal bearing No. 147/89 dated 14.3.1989.
2. The facts and the pleas made before the learned lower authority as set out in the Tribunal’s order are as under:
The facts of the case are that the appellants are manufacturers of cranes at Bangalore falling under heading 8426 of the Central Excise Tariff Act, 1985. They opted for Modvat on 8.4.1986 for the financial year 1986-87. They opted out of it on 28.4.1986 and started clearing excisable goods without payment of duty from that date availing duty exemption under Notfn. No. 175/86. The Asstt. Collector of Central Excise, LalBagh Division, Bangalore, objected to this and issued a show cause notice to them and on considering the reply thereto held that the duty free clearances effected by the appellants from 28.4.1986 is without authority. He also held that Rule 57A relating to Modvat credit on inputs does not provide any provision for opting out of Modvat when once the option was exercised during the same financial year and that a manufacturer having once opted cannot change his option during the same financial year. This finding of the Asstt. Collector was upheld by the Collector (Appeals) in his order dated 11.6.1987. The appellants have contended in their appeal memorandum that there is nothing in the Rules 57A to 57J of Central Excise Rule s, 1944, to indicate that a manufacturer cannot opt out of the Modvat Scheme during the same financial year once he has exercised his option for it at the beginning of the financial year.
3. The Tribunal on the issue raised before it has followed their earlier order bearing No. 260/87 dated 27.4.1987 and also another decision in the case of Brooks Industries v. CCE, Hyderabad reported in 1989 (13) ETR 399 and also took note of the clarification of the Govt. of India reported in 1988 ECR (17) 30C. The Tribunal has also found that the clarification of the Board was in consonance with the scheme of the Modvat and the view of the Tribunal.
4. The point of law raised before the Tribunal is as under:
To determine whether the Hon’ble Tribunal is correct in setting aside the order of the lower authority and allowing the respondents appeal, when legally the respondents have rendered themselves ineligible to avail the benefits of exemption under Notfn. No. 175/86-CE dated 1.3.1986 inasmuch as the first clearances made by them during the financial year have suffered duty whereby the conditions stipulated under Notfn. No. 175/86-CE dt. 1.3.1986 have become sullied.
5. We observe that no plea was made before the Tribunal in the way the point has been now formulated. The question that was considered by the Tribunal was whether once a person has opted for the Modvat credit during the same financial year he could opt out of it and claim the benefit of Notfn. No. 175/86 available to small scale manufacturers. The Tribunal has held that in terms of Rule 57A there was no such bar. After opting out of it how the benefit of notification is to be given and to what extent would be contingent upon the conditions of notification to be satisfied under the law. So far as the question of opting out of the Modvat is concerned and opting for the benefit of Notfn. No. 175/86 in the same financial year is concerned, the Tribunal has clearly brought out that there is no legal bar to it. The question as has been formulated is that if the appellants opt out, they would not be eligible for the benefit of Notfn. No. 175/86 was not urged before the Tribunal. This question therefore cannot be said to arise out of the order of the Tribunal. We therefore, hold that no question of law would arise for reference. The reference application is therefore rejected.