Collector Of Central Excise vs Jagdamba Electronics on 25 June, 1993

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Customs, Excise and Gold Tribunal – Delhi
Collector Of Central Excise vs Jagdamba Electronics on 25 June, 1993
Equivalent citations: 1993 (68) ELT 144 Tri Del

ORDER

Jyoti Balasundaram, Member (J)

1. For reasons recorded below, the stay applications of the Revenue were rejected and the appeals taken up for hearing, with the consent of both sides.

2. The respondents herein who are manufacturers of audio and video cassettes and parts thereof, were availing of Modvat Credit facility in terms of Rule 57A of the Central Excise Rules, 1944. Modvat Credit on Adhesive Tape, Box Strapping, A.B.S. Resin, Silicon Spray and BOPP Film was disallowed by the Asstt. Collector for the reason that the assessee had availed of the same without filing the requisite declaration under Rule 57G. The lower appellate authority set aside the order of the adjudicating authority on the ground of time-bar, holding that demand of credit taken prior to six months from date of issue of show cause notice is barred under Rule 57-I. Hence these appeals by the Revenue.

3. We have heard Shri B.D. Bhagat, learned DR and Shri R. Nambirajan, learned Counsel. The contention of the Department that the limitation period of six months is to be computed from the date of submission of monthly RT-12 returns filed in March and April, 1989 for the months of February and March, 1989 and return filed in February, 1990 for January, 1990, and not from the date of taking credit, is without force, in view of the finality of the matter as expressed by the Tribunal in the case of Arunachal Plywood Industries v. CCE 1992 (62) E.L.T. 830 and CCE, Patna v. Asia Insulated Wires (P) Ltd. 1993 (44) ECR 131 – it has been held therein that the relevant date for computation of limitation under amended Rule 57-I(1 )(i) is the date of credit and not the one of its utilisation for payment of duty or date of submission of RT-12 return which will be subsequent to the date of credit. The relevant extract from the Asia Insulated Wires case is reproduced below :-

“The amendment in question places the matter in a different perspective. The Heading of the amended Rule reads “Recovery of Credit wrongly availed of or utilised in an irregular manner”. It also specifically covers a situation where such credit has already been utilised. Such utilisation being for payment of duty on the final products, such cases of payment of duty by utilisation of Modvat Credit would be more specifically covered by Rule 57-I in preference to Section 11A and as the time-limit factor has been incorporated therein to bring it within the type of time discipline provided for in the latter provision, there should be no disadvantage for the modvat user. In fact the amended Rule 57-I places the Department and not the assessee at a slightly disadvantageous position vis-a-vis Section 11A inasmuch as the relevant date for the start of the limitation period is the date of such credit and not the one of its utilisation, for payment of duty or the date of the submission of the RT-12 return which will be subsequent to the date of credit. When the credit is utilised it becomes a case of payment of duty and normally the provisions of Section 11A should come into play in the matter of relevant date and the time limit factor, but the comprehensive amendment of Rule 57-I appears to have displaced it.”

The order of the Tribunal in the case of CCE, Rajkot v. Jaswandamal Dhannamal 1990 (49) E.L.T. 541 (Tri.) does not advance the case of the Department as that decision was rendered in the context of Rule 57-I as it stood prior to its amendment on 6-10-1988, while in these appeals, the period in dispute is post amendment.

4. In the result, the impugned orders are confirmed and the appeals dismissed as already announced in open court.

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