ORDER
S.S. Sekhon, Member (T)
1. After hearing the stay application for some time it transpires that the appeal itself could be disposed off at this stage. Therefore after waiver of pre-deposit and hearing both sides the appeal is being disposed off.
2. The appellants availed modvat credit at 15% of CVD :
a) Furnace oil imported by them after paying the duties. Credit was availed on 22/03/97 and Bill of Entry was submitted along with RT-12 return to the Range on 04/04/97.
b) On 03/05/97, by Notification No. 14/97-CE(NT) credit on furnace oil was restricted to the extent of 10% of the duty paid.
c) By Section 87 of Finance Act 1997, Notification dated 03/05/97 was given retrospective effect from 23/07/96.
d) Department However took action for implementing the restricted credit by a show cause notice dated 03/04/2002 invoking the larger period under Rule 571 of the Rules read with proviso to Section 11A and demanded the reversal of credit of 5% amounting to Rs. 5,78,121/- with interest.
e) The Commissioner (Appeals) upheld the order of the lower authority confirming the re-credit requirement of Rs. 5,78,121/- imposed of equivalent penalty under Section 11AC and Rs. 1 lakh under Rule 173Q with interest. Hence this appeal.
3. It is found that the letter dated 17/09/98 asking the appellants to reverse the credit is much after the period of limitation. The question of limitation has to be re-determined by the original authority in denovo proceedings, especially the application of Retrospective Amendment as held by Supreme Court in the case of J.K. Spinning and Weaving Mills Ltd., & Others (1987 (32) ELT 234 (SC) submission of the appellant and thereafter determine the issue. Appeal is therefore allowed as remand to original authority to re-adjudicate the matter after granting a hearing to the appellants.
(Pronounced in Court)