ORDER
Archana Wadhwa, Member (J)
1. Vide the impugned orders, the authorities below have confirmed the duty an amount of Rs. 2,87,270 along with penalty of Rs. 1,000 imposed upon the appellants on the ground that the appellants could not utilise the idle amount of Special Excise Duty towards payment of Basic Excise duty by 31.3.94, in terms of Rule 57F(8) of Central Excise Rules, 1944. As per the provisions of the said Rule, the assessees were entitled to transfer the Special Excise Duty paid on the inputs on or prior to 28.2.93 to their Basic Excise Duty head and to utilise the same within a period of one year i.e. upto 31.3.94. The appellants moved an application to their jurisdictional Assistant Commissioner on 8.3.94 seeking his permission to transfer the Special Excise Duty to Basic Excise Duty head. Subsequently, they also approached the Superintendent of Central Excise for grant of permission in respect of the transfer of the credit of the Special Excise Duty to Basic Excise Duty on 31.3.94 Not receiving any reply from the said authority, the appellants transferred the amount to their own.
2. Based upon the above facts, a show cause notice was issued to the appellants proposing to deny the credit so transferred by them and thereafter, utilised towards the payment of Basis Excise Duty on the final product after 31.3.94. The said show-cause notice culminated into impugned order passed by the Assistant Commissioner wherein he observed that the appellants submitted an application only on 8.3.94 giving short period to the Revenue to check and verify their application and as such permission could not be granted by proper officer by 31st March, 1994. He held that inasmuch the appellants had utilised the credit after 31st March, 1994, the same was not in accordance with the provisions of Rule 57F(8) of Central Excise Rules, 1944 which provides that credit of Special Excise Duty paid on inputs on or prior to 28.2.93 should be utilised towards the payment of final product cleared prior to 31.3.94. Accordingly, he confirmed the demand of duty and also imposed penalty. The said order was upheld by the Commissioner (Appeals).
Hence the present appeal.
3. Shri B.K. Munshi, Ld. Consultant appearing for the appellants, submits that admittedly they have filed an application on 8.3.94 with their jurisdictional Assistant Commissioner seeking his permission for transfer of the Special Excise Duty credit to their account of Basic Excise Duty credit. The said application was moved much prior to 31.3.94 i.e; the last date stipulated in Rule 57F(8). He submits that had the Assistant Commissioner given his permission, they would have utilised such credit towards the payment of Basic Excise duty in the month of March 1994 itself and well before 31.3.94. He submits that during March 1994, they had paid duty to the extent of Rs. 25.29 lakhs from their PLA. He submits that the fault lies with the Revenue and they could be made to liable for the delay on the part of the Assistant Commissioner to grant the permission.
4. Shri T.K. Kar, ld. SDR appearing for the Revenue, submits that the provisions of Rule 57F(8) clearly stipulated that the credit of Special Excise Duty is required to be utilised towards the payment of Basic Excise Duty on the final product cleared prior to 31.3.94. Inasmuch as the appellants have utilised the credit after the said date, the same has been rightly rejected by the authorities below, it is the contention of the Revenue that a period of one year was given to the assessees to make an application and to seek the permission for transfer, the appellants have moved an application only on 8.3.94 giving insufficient time to the Revenue to conduct the checks and verifications and to decide the application. He draws my attention to the impugned order of Commissioner (Appeals) wherein he has observed that it requires sufficient time for the proper officer to scrutinise such type of application, particularly, when there is likely to be a good number of such applications on the similar ground at a particular point of time from other assessees also. As such, he submits that the fault lies with the appellants which have submitted the application late.
5. After giving my careful consideration to the issue involved, I find that no doubt Rule 57F(8) required the appellants to utilise to transferred credit of Special Excise Duty for payment of Basic Excise Duty on the final product cleared prior to 31.3.94. The various trade notices issued by the Commissionerate directed the manufacturer to seek permission of their jurisdictional Central Excise Authorities for such transfer by way of making an application to that effect. In the present case, the appellants had made an. application on 8.3.94 i.e. before expiry of the period granted to them under Rule 57F(8). Had the Assistant Commissioner decided the appellants’ application in time, the appellants would have in a position to utilise the transfer credit before 31.3.94. It is on record that a substantial amount of duty was paid by them out of their PLA in the month of March 1994. The reasoning of the Assistant Commissioner that by filing the application on 8.3.94, the appellant has not given sufficient time by the Revenue to decide the said application is not in accordance with the provisions of law inasmuch as there is no last date fixed either by rule or by any trade notices to move such application before the proper officer. The Assistant Commissioner has himself observed that neither of the trade notices, especially mentioned any date whatsoever as the last date of filing of application but has further observed that the assessees were given a year of time by which such they should have filed an application. In these circumstances, I am not in agreement with the views expressed by the authorities below with the application filed on 8.3.94 did not give the revenue sufficient time to decide upon the same for the permission of transfer. I agree with the appellants contention that if the application would have been decided in time, they would have utilised the said credit before 31.3.94. In the circumstances, the appellants’ failure to utilise the credit before cut off date, cannot be attributed to them but the same is clearly attributable to the non-action on the part of the Assistant Commissioner.
6. Inasmuch as the appellants had paid duty to the extent of Rs. 25.29 lakhs from their PLA in the month of March, 1994,I am of the view that the said duty payment is required to be adjusted against an amount of Rs. 2,87,270 which was admissible to the appellants. The same may either be credited to the appellants’ modvat account or be adjusted in PLA account. There is no justification for imposition of personal penalty of Rs. 1,000 upon the appellants. Appeal is disposed of in the above terms.