Customs, Excise and Gold Tribunal - Delhi
Polyplex Corporation Ltd. vs Commissioner Of C. Ex. on 4 May, 1999
Equivalent citations: 2000ECR675(TRI.-DELHI), 1999(111)ELT370(TRI-DEL)
ORDER
P.C. Jain, Vice President
1. Brief facts of the case are as follows :-
1.1 The appellants are manufacturers of polyester film out of polyester chips. The polyester chips are manufactured by the appellants' job workers from DMT and MEG directly supplied to them by the respective dealers / manufacturers of the latter at the instruction of the appellants. In respect of an invoice dated 30-11-1994 for DMT and MEG the appellants on receipt of intermediate product - polyester chips - received from the job workers took the credit of Rs. 1,52,880.00 on 24-7-1995. Both the authorities below have denied Modvat credit on the ground that credit had been taken beyond six months from the date of issue of the invoice which is not permissible in view of the amendment made in Rule 57G disallowing credit of duty after six months of the date of issue of the invoices. This amendment was made by Notification 28/95, dated 29-6-1995. Hence this appeal before the Tribunal.
2. Learned Advocate, Shri V. Swaminathan for the appellants has urged that the amendment made in Rule 57G by the said Notification dated 29-6-1995 will not apply retrospectively since the Central Government does not have the power to make rules with retrospective effect, as held by the Apex Court in the case of Cannannore Spg. & Wvg. Mills Ltd. v. C.C.E. [1978 (2) E.L.T. 375 (S.C.)]. He further submits that the amendment made in Rule 57G, by clear implication as well, cannot be read to have a retrospecive effect.
2.1 He further submits that the Tribunal on this very amendment in Rule 57-G has held in the case of TELCO v. C.C.E., Bombay reported in 1996 (87) E.L.T. 157 that the limitation of six months under Rule 57G(2) for taking the credit as introduced from 29-6-1995, has no retrospective effect.
2.2 Learned Advocate further submits, without prejudice to the aforesaid contention, that Rule 57J is an overriding rule inasmuch as this starts with the expression "notwithstanding anything contained in this rule". Therefore, when the appellants are admittedly working under the provisions of this rule, the benefit of Modvat credit could be taken by them only on receipt of intermediate product from their job workers and the provisions of 57J will override the provisions of Rule 57G (2). For this proposition, learned Advocate relies on Supreme Court's judgment in the case of Union of India v. G.M. Gokil and Ors. (AIR 1984 SC 1022) [at page 1026 para 10]. He relies on the following obervations of the Apex Court in the said Report :-
"It is well known that a Non Obstante Clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to aviod the operations and effect of all contrary provisions. Thus, the Non Obstante Clause in Section 70, namely, 'notwithstanding anything in that Act' must mean notwithstanding anything to the contrary contained in that Act and as such it must refer to the exempting provisions which would be contrary to the general applicability of the Act. In other words, as all the relevant provisions of the Act are made applicable to a factory notwithstanding anything to the contrary contained in it, it must have the effect of excluding the operation of the exemption provisions. Just as because of the Non Obstante Clause the Act is applicable even to employees in the factory who might not be 'workers' under Section 2(1), the same Non Obstante Clause will keep away the applicability of exemption provisions quo all those working in the factory. The Labour Court, in our view, was, therefore, right in taking the view that because of the non obstante clause Section 64 read with Rule 100 itself would not apply to the respondents and they would be entitled to claim overtime wages under Section 59 of that Act read with Section 70 of the Bombay Shops and Establishments Act, 1948."
Learned Advocate, therefore, submits that credit has been wrongly denied by the authorities below and the appeal, therefore, be allowed with consequential relief to the appellants.
3. Opposing the contention learned JDR, Shri D.K. Nayyar submits that the credit has been rightly denied in view of Tribunal's judgment in the case of Osram Surya Pvt. Ltd. v. C.C.E. reported in 1998 (29) RLT 684. As regards the overriding effect of Rule 57J, learned JDR submits that the said rule obliterate the provisions of time limit stipulated in Rule 57G. He further submits that in December 1996 time limit has also been provided in Rule 57J. The amendment made in December 1996 in Rule 57] be taken as of a clarificatory nature and be applied retrospectively.
3.1 In his rejoinder, learned Advocate submits that at the relevant time there was no time limit provided in Rule 57] whereas Rule 57G provided a time limit. They would, therefore, be contrary to each other. Consequently, in view of Apex Court's judgment in the case G.M. Gokil, supra provisions of Rule 57J will override the provisions on Rule 57G.
4. I have carefully considered the pleas advanced from both sides. I observe that the controversy whether retrospective effect to the amendment made in Rule 57G on 29-6-1995 can be given or not has been dealt at length by a Division Bench of the Tribunal in the case of National Steel Industries Ltd. v. C.C.E., Indore vide its Order No. A/87-88/99-NB dated 5-2-1999 to which I was a party. In this connection para 13 of the said order of the Tribunal in the case National Steel Industries, supra is reproduced below :
"13. When once it is accepted that taking Modvat credit is a right vested under statute and that statutory right so invested cannot be divested by any subsequent enactment unless the subsequently enacted statute expressly provides for the same. A statute which affects rights in existence is not readily construed to affect adjudication of pending proceedings. In the words of Shri Das C.J. The golden rule of construction is that, in the absence of anything in the enactment to know that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed See Gangapati v. N. Subhash Choudry - AIR 1957 SC 540. P553. In the instant case the amendment which comes into force from 29-6-1995 does not express such situation applying the provisions retrospectively. A right to take Modvat credit which was accrued to the assessee prior to amendment of Rule 57G is. a vested right or at any rate is an existing right. In view of the settled position a pre-existing right cannot be destroyed by an amendment unless the amendment is shown to have been made retrospectively by express words or necessary in-tendment. The amendment does not express such situation and there is no clear implication that legislation did intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned. Accordingly amendment is neither retrospective nor existing right can be curtailed by applying the amended provisions. Time stipulation inserted in the amendment is applicable to the credits which may accrue subsequent to the amendment. In view of our foregoing conclusion we do not find any justification for the recovery of the duty and imposition of penalty and in the result we set aside the impugned order allowing the appeal with consequential relief."
4.1 In the present case it is obvious that the goods had been received by the appellants herein under Rule 57] in September, 1995 although the invoice on which Modvat credit has been taken is dated 30-11-1994. There is substantial force in the plea of the learned Advocate that Rule 57] has an overriding effect over the Rule 57G in view of Supreme Court's judgment in the case of G.M. Gokil relied upon by him.
5. Reliance placed by the learned JDR on the Tribunal's judgment in the case of Osram Surya Pvt. Ltd., supra is not applicable to the facts and circumstances of this case. In the said case it was stated that the goods had been received in April, 1995 and an entry had been made in RG 23A/Pt. I in April 1995. There was, therefore, no apparent reason for not taking credit of duty at the time of receipt of the goods in the factory in April, 1995 itself. The reasoning advanced by the appellants for not taking the credit was that it was on account of the lapse of employee of the appellants therein. It is for this reason that the Bench in the case of Osram Surya Pvt Ltd. invoked the ratio of Larger Bench in the case of Brakes India Ltd [1996 (15) RLT 68], following the ratio of the Supreme Court judgment in the case, Citadel Fine Pharmaceutical reported in 1989 (42) E.L.T. 515 (S.C.). I am, therefore, of the view that judgment in Osram Surya Pvt Ltd. has been delivered by the Tribunal in the peculiar facts available in that case.
6. In any case even if the controversy regarding applicability of Rule 57G - whether retrospective or not is ignored in this case, there was no provision of time limit in Rule 57J at the relevant time in this case when the credit was taken. I have already held that provisions of Rule 57J will have an overriding effect over the provisions of Rule 57G.
7. In view of the foregoing discussion, credit taken by the appellants under Rule 57J, even though after six months of the date of issue of the invoice has been wrongly denied by the lower authorities. Consequently, I set aside the impugned order and allow the appeal with consequential relief to the appellants.