Customs, Excise and Gold Tribunal - Mumbai
Vinubhai Steel Co. Pvt. Ltd. vs C.C. Ex. on 26 March, 2004
Equivalent citations: 2004(170)ELT296(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. Appellants are manufacturers of Iron & Steel products and were availing Modvat Credit Scheme. On 25.7.1997 there was a balance of Rs. 92,028/- in RG 23A register, from that date they opted & shifted to discharge duty on certain items which were covered under Section 3A Scheme. However they continued to clear other items by debit against the credit balance since the other items was not cleared under Section 3A Scheme. They intimated this to the department and filed RT-12 returns.
2. Somewhere in Jan 2000, the audit officers pointed out that the balance of Rs. 92,028/- on 25.7.97 in RG 23A credit Register should have lapsed due to amendment to Rule 57F(17). Reversal of this amount of Rs. 92,028 were directed by letter from the Range Superintended on 28.4.2000 & 11.5.2000 & 30.5.2000 & 6.7.2000, the higher authorities in the department did not interfere on representation of the assessee who vide TR6 dt. 12.7.2000 paid an (SIC) amount of Rs. 92,028/- and filed an appeal and a letter dated 6.7.2000 of the Range Superintended, CCE (Appeals) allowed the appeal. Matter was not taken further by Revenue. Consequent Refund was sanctioned of Rs. 92,028/- paid vide TR6 dt. 12.7.2000. Revenue filed an appeal against this sanction & the CCEC (Appeals) allowed the same after findings-
"I have carefully gone through the facts of the case and cross objections filed by the Respondent.
In the instant case, I find that the Range Superintendent, vide his letter F. No. AR.III/CEPA/2000 dated 06.07.2000 directed the Respondent to reverse the modvat credit wrongly availed by the Respondent as objected by the Audit Office. I find that in pursuance to direction of the department, the Respondent had immediately paid the modvat credit wrongly availed under protest on 12.07.2000. I also find that simultaneously the Respondent had filed an appeal before the commissioner (Appeals), Customs and Central Excise, Rajkot. The Commissioner (Appeals) vide his OIA No. 347/2001 dated 30.03.2001 directed the lower authority to conduct the proceedings afresh as per law before recovery of demand.
I further find that the Respondent had filed refind claim in light of the decision of the Commissioner (Appeals) with the jurisdictional Deputy Commissioner which was sanctioned erroneously to the Respondent cannot utilize the modvat credit lying in the balance as on 31.07.1997 towards payment of duty on any excisable goods, whether cleared for home consumption or for export as laid down under the provisions of Rule 57F (17)(d) of the Central Excise Rules, 1944 as the credit lying unutilized in the modvat account has lapsed in view of the introduction of Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944. I further find that there can be no two opinion on the point that the credit has been lapsed in view of the provisions of Rule 57F (17)(d) of the Central Excise Rules, 1944.
I find that the decisions of higher judicial forum cited by the Revenue in the appeal memorandum are relevant to the present case.
In view of the above discussion and findings, I allow the appeal filed by the Revenue and set aside the impugned Order.
Hence this appeal, after hearing both sides & considering the issue involved it is found -
a. The lapse of credit under Rule 57F(17) cannot be challenged. A reading of the rule makes it very clear that the balance can not be utilized for other goods. Therefore the clearances made against the balance on 25.7.97 should have been held to be not on payment of duty & the said clearances could have been considered to be removed without payment of duty. Such demand of duty on clearances made against debits of non existence because of lapse of balances of credit on 25.7.97 & thereafter cannot be made good and regularized by creating a balance as on 25.7.97 by TR6 dt 12.7.2000.
b. Recovery of duty on clearances made against lapsed balance cannot be made as done herein by this indirect method of first raising the lapsed balance by TR6 on 12.7.2000 and there after lapsing it again.
c. The refund of amounts deposited on TR6 dt 12.7.2000 therefore cannot be found fault with.
3. Consequently the order impugned is required to be set aside & appeal allowed.
(Pronounced in Court)