Customs, Excise and Gold Tribunal - Delhi
Birla Yamaha Ltd. vs Collector Of Central Excise on 19 October, 1995
Equivalent citations: 1996(83)ELT396(TRI-DEL)
ORDER
1. The appeal is filed against the demand of about Rs. 53 lakhs and odd on account of duty and Rs. 3.63 lakhs and odd on account of maintenance expenses incurred by the dealers of the appellant. By order dated 7-6-1995 we indicated that regarding the demand of Rs. 53 lakhs and odd, the appellants have been able to make out a prima facie case. Regarding the claim of Rs. 3 lakhs and odd, we concluded that the appellants have not been able to make out a prima facie case. Finally, we took the view that in case the appellants were directed to deposit the entire duty amount and penalty, it would create undue hardship. We directed the appellant to deposit Rs. 3.63 lakhs within six weeks from the date of receipt of the order and report compliance to the Registry. When the matter came up on 31-8-1995, it was represented by the appellant that the amount has been debited in RG 23A Part II and he undertook to produce the certificate for having complied with the stay order. We directed the appellant to produce the certificate today.
2. The learned counsel for the appellant submits that he approached the Jurisdictional Superintendent to issue a certificate of the debit made by him and the Superintendent refused to give the certificate.
3. The Departmental Representative, Shri Vipin Handa justified the stand taken by the Superintendent. According to him, requirement of deposit is a statutory requirement under Section 35F of the Central Excises and Salt Act, 1944 while the credit to which the appellant is entitled in the Modvat account, is the credit for duty and one cannot be mixed with the other. He placed reliance on a decision of the learned single Judge of the Madras High Court in the case of Eltex Rudy Ltd. v. Superintendent of Central Excise, Coimbatore reported in 1994 (70) E.L.T. 208 (Mad.). This decision is not of assistance since it deals only with the question of issuing certificate under Rule 57E of the Central Excise Rules, 1944 to enable the customer to avail Modvat credit. On the other hand, it is seen that in Stay Application No. E/Stay/742/94-A in appeal No. E/1274/92-A and similar other matters, the Bench of three Members of the Tribunal directed as follows :-
"The learned counsel prayed that they may be permitted to make the pre-deposit by way of debiting the RG-23A Pt. II and make up any shortfall by way of cash deposit. Permission granted."
It is true that what is required to be done at this stage is deposit under the statute and what can be given credit to for the Modvat amount is duty. If the appellant had not filed the appeal, he should certainly be given credit for the amount of duty out of the Modvat credit to the extent of the Modvat credit. The effect of filing of appeal cannot be that he is temporarily deprived of the right to adjustment out of the Modvat credit and should deposit the amount over again. That would amount to a double payment in the sense the amount lying to his credit continues to lie in the account and he has to make a cash deposit. The statutory provision regarding deposit came into existence long before the. Modvat credit system was introduced. With the introduction of the Modvat, the statutory provision of deposit has to be understood in the light of the Modvat system. That being so, it appears reasonable to hold that to the extent of credit available in the Modvat credit account, it will be possible for the appellant before the Tribunal to get credit by temporary adjustment to the extent to which adjustment can be made. This is what the Tribunal did in the cases earlier. Further the order dated 31-8-1995 also indicates that we were inclined to grant the request.
4. When an appeal is pending before an authority, payment adjustment and the like will only be subject to the final order to be passed by the appellate authority. If amount to cover the liability for deposit is available in the Modvat account, any permission which we grant for making temporary adjustment out of the account will be subject to the result of the appeal. That being so, neither party is adversely affected by issuing a direction prayed for.
5. An opportunity is granted to the department to confirm or deny the submission made by the appellant that the appellant had made debit for the amount required in the Modvat account. The D.R. prays for three weeks, time to get the information. Adjourned to 9-11-1995.