ORDER
Lajja Ram, Member (T)
1. The Revenue had filed a Reference Application with regard to the Tribunal’s final decision No. A/1088/95-NB, dated 20-11-1995 wherein the Tribunal had held that even during the period when no time limit was prescribed under Rule 57-I of the Central Excise Rules, 1944, the time limit as prescribed in Section 11A of the Central Excises and Salt Act, 1944 was to be read in the provisions of Rule 57-I. The Revenue had stated that Rules 57-I as it existed prior to its amendment w.e.f. 6-10-1988 did not have any specific time limit and that the Modvat credit wrongly taken could be collected back within a reasonable period of time. The Revenue had cited the Gujarat High Court’s decision in the case of Torrent Laboratories (P)Ltd. v. U.O.I. – 1991 (55) E.L.T. 25 (Gujarat) wherein the Gujarat High Court had held that no time limit as such was prescribed under Rule 57-I of the Rules prior to the amendment of the Rule w.e.f. 6-10-1988.
2. Under the Modvat Scheme, the duty paid on the inputs is eligible for Credit when such inputs are received by the manufacturer for utilisation in or in relation to the manufacture of the final products. The duty liability had been discharged by the manufacturer of the inputs. When there is no time limit fixed, reasonable time limit had to be read in the provisions of the law as held by the Hon’ble Supreme Court in the case [1989 (2) SCALE 9 at page 44]. In case the Modvat credit had been taken irregularly, it does not mean that any extra duty liability is being demanded and it is the reversal of the Modvat Credit, which is stipulated in Rule 57.
3. In the case of Rock Drill (India) v. CCE – 1993 (48) ECR 320 (Tribunal), a similar matter has come up for consideration before the Tribunal and the Tribunal relying upon the Gujarat High Court’s decision in the case of Torrent Lab. (P) Ltd. v. U.O.I, had held that the provisions of Section 11A of the Act, as regards the period of limitation, could not be read into Rule 57-I as it stood prior to the amendment on 6-10-1988. Para Nos. 89 to 100 are extracted below :-
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4. Taking all the relevant considerations into account, the following questions of law arising out of the Order No. A/1088/95-NB, dated 20-11-1995 of the Tribunal are referred to the Hon’ble High Court for decision :-
“Whether Rule 57-I of the Central Excise Rules, as it stood prior to amendment effected on 6-10-1988, is subject to the provisions of limitation prescribed under Section 11A of the Central Excises & Salt Act, 1944.
OR
Whether Rule 57-I is independent of Section 11A aforesaid and could be invoked for recovery of Modvat credit even covering the period beyond six months from the date of credit before 6-10-1988.”