Customs, Excise and Gold Tribunal - Delhi
D.C.M. Data Products vs Collector Of Central Excise on 16 February, 1994
Equivalent citations: 1994ECR601(TRI.-DELHI), 1994(71)ELT631(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. Both the appeals involve common issues and are hence heard together and disposed of by this common order. E/2380/87-NRB arises out of the order of Collector (Appeals), New Delhi upholding the order of the Assistant Collector of refusal of permission to transfer an amount of Rs. 18,85,256.20 of proforma credit lying unutilised in RG-23 Part II Register to RG 23A Part II Register in terms of Rule 57H(3) of the Central Excise Rules, 1944 on the ground that the credit was not lying unutilised immediately before obtaining the dated acknowledgment of the Rule 57G declaration. E/2501/91-NRB arises out of the order of the Collector (Appeals), New Delhi upholding the order of the adjudicating authority of rejection of refund claim for the same amount of unutilised proforma credit lying in RG-23 as time barred.
2. The facts of the case are as follows : The appellants herein are inter alia engaged in the manufacture of computers, office machines and calculators. Initially computers were being classified under TI 33D of the Schedule to the erstwhile Central Excise Tariff. In November 1979 the Departmental authorities initiated proceedings for reclassification under TI 33D and the classification issue was settled in July, 1983. Consequent upon the classification of computers under TI 33D, Notification No. 148/76-CE, dated 15-7-1976 exempting computers falling under TI 33DDD from so such of the duty of excise leviable thereon as is equal to the amount of duty already paid on peripheral devices, etc. included in the value of the computers, became applicable and w.e.f. 19-6-1980 the procedure set out in Rule 56A was to be followed for availing the said exemption. The appellants vide their letter dated 21-6-1982 requested the Assistant Collector for grant of permission for availing proforma credit of excise duty - countervailing duty paid on peripheral devices used in the computers. On 30-7-1983 the Assistant Collector permitted the appellants to avail proforma credit w.e.f. the date of the application i.e. 21-6-1982 upon the satisfaction and verification of the concerned Sector Officer, Regarding availment of proforma credit for the period prior to 21-6-1982, the applicants were directed to apply to the Collector of Central Excise, New Delhi which was accordingly moved in September 1983. The appellants were informed vide letter dated 9-3-1984 of the Assistant Collector that the delay had been condoned by the Collector under Rule 56A (2)(b) and the appellants were directed to contact the Assistant Collector to whom necessary directions were reported to have been issued. Further correspondence was exchanged between the appellants and the Asstt. Collector and ultimately credits were allowed in September 1983, April 1984, Febr. 1985 and May 1985. The credit which was ultimately granted with retrospective effect could not be utilised for the clearances of the past period resulting in an unutilised balance remaining in proforma credit while duty on computers was paid through PLA. With effect from 17-3-1985 computers falling under TI 33DD were wholly exempt from duty vide Notification 67/85. The application of August, 1985 by the appellants to the Principal Collector for recasting of the RG 23 Register was turned down vide order dated 21-10-1986 of the Asstt. Collector. The Collector (Appeals) rejected the assessee's appeal by order dated 16-6-1987 and the appellants filed an appeal before the Tribunal which by its order dated 12-12-1989 remanded the matter to the Assistant Collector to decide the issue on merits. Notice was issued to the appellants in June, 1990 proposing rejection on the grounds of time bar and on the ground that cash refund is not permissible in view of Rule 56A(3)(vi)(b). Applying the provisions of Section 11B of the CESA, the Assistant Collector rejected the claim as time barred vide his order dated 3-9-1990 and the Collector (Appeals) upheld the rejection against which the appellants have filed E/2501/91-NRB.
3. In the meanwhile, Notification 76/87, dated 1-3-1987 by which computers and peripheral devices falling under Heading 84.71 CETA 1985 were subject to a duty of 10% advalorem, came into effect. Chapter 84 being one of the Chapters notified under Modvat, Modvat credit was available in respect of inputs used in the manufacture of computers and peripheral/devices. The appellant had been permitted vide order dated 30-7-1983 of the Asstt. Collector to avail proforma credit under Rule 56A which covered computers falling under the erstwhile TI 33DD during the relevant time and that order continued to remain in force. On 23-6-1987 the appellants filed relevant declaration under Rule 57G proposing to avail of modvat credit as computers were covered by modvat scheme. As on that date the unutilised proforma credit in the RG 23 Part II Register amounted to Rs. 18,85,256.20 and appellants applied for transfer of this credit to modvat account in terms of the provisions of Rule 57H (3) which was rejected by the Assistant Collector whose order was upheld by the lower appellate authority, against which E/2380/87-NRB has been preferred.
4. We have heard Shri V. Sridharan, learned Advocate and Shri V.C. Bhartiya, learned DR and carefully considered their submissions.
5. The following is the summary of credits and utilisation :
A. Total Excise Duties Paid Period Through PLA Through RG-23 19-6-1980 to Rs. 2,72,10,619.81 31-7-1983 Rs. 1,71,30,745.81 (19-6-1980 - 21-6-1982) Rs. 1,00,79,874.00 (22-6-1982 - 31-7-1983) 31-7-1983 to Rs. 87,093.23 Rs. 60,33,665.56 17-3-1985 B. List of Credits Period Amount Remarks 21-6-1982 to Rs. 29,05,358.10 Regular D-3's, filed. Credit al 13-9-1983 lowed only on 13-9-1993 19-6-1980 to Rs. 40,13,323.62 Against our application dt. 1-
21-6-1982 9-1983 for the period 19-6-
1980 - 21-6-1982 allowed on
17-4-1984
21-6-1982 to Rs. 5,03,699.63 Against our application dt.
31-7-1983
19-4-1984 for which D3 in-
timation not given. Credit al
lowed on 6-2-1985
19-6-1980 to Rs. 2,27,080.41 Due to calculation error by the
26-7-1980 Customs Department. Credit
allowed on 18-5-1985
13-9-1983 to Rs. 2,69,460.00 Regular D-3 declaration
17-3-1985 Rs. 79,18,921.76
C. Balance in RG-23 Account
Balance as on Rs. 18,85,256.20 A debit of Rs. 31,440/- was
8-8-1986 made against the unused
Peripherals as on 17-3-1985.
Debit entry made on 8-8-1986.
6. The appellants seek recasting/readjustment of RG-23 and PLA as the necessity for paying duty through PLA arose entirely due to the delay on the part of the Department in allowing proforma credit in time as would be evident from the chronology of dates and events given below :
Date Chart regarding applications made for grant of proforma credit 21-6-1982 During pendency of the decisions of the Department for classifying the goods under TI 33DD the appellants applied for granting permission for availing proforma credit.
9-8-1982 Appellants' reminder to Assistant Collector
9-9-1982 Appellants' letters to Asst. Collector for expediting
the permission
20-10-82 under 56A
18-2-1983
14-3-1983
30-3-1983
9-5-1983
30-7-1983 Letter of the Assistant Collector permitting to avail
proforma credit with effect from the date of application
i.e. 21-6-1982, for all items which have been classified
as computers falling under TI 33DD by his office. In para
4, the Assistant Collector however stipulated that credit
can be availed after permission of Sector Officer. The
Assis tant Collector directed the appellants to apply to
the Collector for availing proforma credit for the period
prior to 21-6-1982 i.e. from 19-6-1980.
13-9-1983 Sector Officer verified and allowed credit for an amount
of Rs. 29,05,358.10 for inputs received during the period
21-6-1982 to 13-9-1983 for which regular D3 intimation have
been filed.
1-9-1983 The appellants applied to the Collector for grant of
proforma credit for inputs received during the period
from 19-6-1980 to 21-6-1982. In the same application
permission was also sought from the Collector for extending
proforma credit in respect of inputs received after
21-6-1982 for which declaration form D3 was not given at the
time of receipt of the input in the factory. The declarations
could not be given as the appellants did not know the
Department's stand on the classifiability under TI 33DD of the
finished product made from these inputs.
19-10-83 Appellants' reminder to the Collector giving the correct
amounts also for the above period.
9-3-1984 Letter of the Assistant Collector (Tech.) of the
Collectorate stating that Collector has condoned the delay
under Rule 56A (2)(b).
17-4-1984 Letter of the Assistant Collector to the Superintendent
pursuant to the above letter of the Collector's office,
permitting credit of amount of Rs. 40,13,323.62 in the
RG-23 in respect of the inputs for the period 19-6-1980
to June 1982.
19-4-1984 Reminder to the Collector for extending the credit for
inputs received from 21-6-1982 to 31-7-1983 for which D3
intimation were not given in view of the indecision of
the Department about the classification of the final
product under TI 33DD for these inputs.
14-5-1984 Letter of the Assistant Collector of the Collectorate
intimating that instructions have been issued to the
Divisional Assistant Collector for the above.
6-2-1985 Letter of the Assistant Collector to the Superintendent
permitting credit of Rs. 5,03,699.63 for the period
21-6-1982 to 31-7-1983 referred to above.
18-5-1985 Additional credit of Rs. 2,69,080.41 for the period
19-6-1980 to 31-7-1980 allowed by the Department due to
payment of further CV duty pursuant to deduction of some
calculation error by the Customs.
13-9-1983 Credit amounting to Rs. 2,69,460/- taken against regular D3
to declaration as and when the inputs were received.
17-3-1985
It is not a case of payment of any duty of excise in excess of which the appellant is claiming refund. We agree with the learned Counsel for the appellants that the provisions of Section 11B of the CESA, 1944 are not applicable to the present case and that Section 11B is not the only Section dealing with the return of the money by the Department to an assessee. In the case of Adarsh Metal Corporation v. Union of India - 1993 (67) E.L.T. 483 (Raj.) the Hon'ble Rajasthan High Court referred to the definition of "relevant date" contained in Section 11B and after pointing out that a refund arising out of an appellate order would not be covered by any of the clauses of Section 11B defining the relevant date, the Court concluded that the provisions of Section 11B are inapplicable for such refunds. The relevant extract from this judgment is reproduced below :
* * * * * *
Explanation B to Section 11 defines relevant date as follows :
* * * * * *
For the repayment of money which arises in the present case, none of the above clauses are attracted and this itself is strong indication that the provisions of Section 11B are wholly inapplicable to a matter of present nature.
7. The judgment of the Hon'ble Bombay High Court in the Deccan Sales Corporation case reported in 1982 (10) E.L.T. 885 (Bom.) has been relied upon by the lower appellate authority to hold that the claim is barred by limitation. In this case the assessee was manufacturing compound fertilizers and used base fertilizers purchased from the market as raw materials. Fertilizers were specified under Rule 56A as eligible for proforma credit benefits. During the period April-June 1969 the assessee had received duty paid inputs eligible for proforma credit for an amount equal to Rs. 2,42,984. However due to objections raised by the Central Excise authorities regarding documents to be produced by the company, this credit came to be allowed to the company only in October 1969. In the meanwhile, the company had cleared compound fertilizers on payment of full duty in cash from the PLA amounting to Rs. 5,16,716.93 and the credit of Rs. 2,42,984/- allowed in October 1969 was utilised for payment of duty thereafter. From 1-3-1970 compound fertilizers manufactured by the assessee company were duly exempt from duty and the company was ultimately left with an unutilised balance of Rs. 77,587/-. Vide letter dated 27-6-1970 the Company requested the Department to transfer the balance from the proforma credit account to the PLA and refund the same. It was claimed by the company that if the credit had been given to it in time, it would not have paid the entire amount of Rs. 5,16,716/- in cash on its final product which would have stood reduced by about Rs. 2,40,000/- which was the approximate quantum of proforma credit allowed in October, 1969 for the period April-June, 1969. The Department rejected the claim on the ground that there is no provision in the proforma credit rule for grant of cash payment. This contention was negatived by the High Court as under :
* * * * * * From the accumulative reading of the entire judgment it is seen that there is no reference either by the assessee or by the respondents or by the Court to any aspect of limitation and, therefore, the observation about limitation appears to have been made in passing. The High Court has not held anywhere that the limitation prescribed in Rule 11 would apply (corresponding to present Section 11B). At this juncture it is also relevant to note that while Rule 56A(5)(i) stipulates a limitation period for raising a demand for recovery of credit allowed erroneously or by omission or by mis-construction, there is no such stipulation for return of money by the Department to an assessee.
8. The issue of cash refund of the balance in set off account has been allowed by the Tribunal in the following cases :
(i) 1990 (50) E.L.T. 546 - MRF Ltd. v. CCE.
(ii) 1990 (50) E.L.T. 482 (T) - MRF Ltd. v. CCE
(iii) 1990.(50) E.L.T. 403 (T) - Sandoz (India) Ltd. v. CCE.
8.1 The High Court of Andhra Pradesh has upheld the order of this Tribunal granting cash refund of balance in set off account in the case of Coromandal Fertilizers Ltd. v. Union of India -1990 (48) E.L.T. 333 (A.P).
9. In the light of the above discussion we hold that the appellants are entitled to the amount of Rs. 18,85,256.20 of proforma credit lying unutilised in RG 23 Part II Register either by way of transfer of the amount to RG 23A Part II Register or by way of cash refund or by way of suitable entry in the PLA and we order accordingly. The order dated 5-4-1991 of the Collector of Central Excise (Appeals), New Delhi is set aside and appeal bearing No. E/2501/91-NRB is allowed with consequential relief. Since we have granted relief in this appeal, no amount is available for transfer in terms of 57H(3) and, therefore, appeal bearing E/2380/87-NRB is dismissed as infructuous.