Customs, Excise and Gold Tribunal - Mumbai
Lakhanpal National Ltd. vs The Commissioner Of Central Excise And ... on 23 April, 1998
Equivalent citations: 1998(62)ECC336
ORDER
K.S. Venkataramani, Vice-President
1. The Appellants are manufacturing excisable goods dry battery cells falling under Heading 85.06 of the Central Excise Tariff Act. They were availing of modvat credit on inputs under Rule 57A of Central Excise Rules. Proceedings were initiated against the Appellant by issue of show-cause notice on 31.7.88 alleging that during the period 1.3.86 to November, 1987 they had irregularly availed of modvat credit. It was alleged that they had taken the credit on gate passes which were not in their name: that declaration for modvat purposes for some of the inputs had been filed after the receipt thereof in their factory and also that they had utilised the modvat credit in the manufacture of final products which were exempt from duty in violation of provisions of Rule 57C. The jurisdictional Assistant Commissioner confirmed the demand on this ground and the Commissioner (Appeals) upheld that order.
2. The R.C. Saxena, the Learned Counsel for the Appellant submits that the demand in this case is hit by limitation being beyond 6 months under Rule 57-I of the Central Excise Rules. Their contention on limitation before the Commissioner (Appeals) has been turned down by that authority on the reasoning that Rule 57-I at the material did not have any limitation prescribed thereunder and that therefore the limitation for recovery of short levied duty contained in Section 11A of the Central Excise Act cannot be imported into that rule. The Learned Counsel thereafter cited and relied upon a catenna of decisions of the Tribunal to the effect that for recovery of wrongful availment of modvat credit under Rule 57-I even prior to its amendment on 6.10.88, the provisions of Section 11A regarding limitation would apply. One of these decisions of the Tribunal in the case of Sudarshan Chemical Industries v. CCE has been challenged in appeal before the Supreme Court and this appeal has been dismissed by the Supreme Court as in .
3. After hearing Shri S.V. Singh, the Ld. DR we find substance in the submission of the Learned Counsel regarding limitation and besides the line of decisions cited by the Learned Counsel we also note that a three member Larger Bench has held similarly in the case of Brakes India Limited v. Collector 1996 (15) RLT 68 wherein the Tribunal considered the conflicting views as regards limitation under Rule 57-I prior to its amendment and following the judgment of the Supreme Court in the case of GOI v. Citadel Fine Pharmaceuticals held that where the statute does not prescribe any time limit a reasonable time limit will have to be read into it and such reasonable time limit, the Tribunal noted under Rule 57-I prior to its amendment will be 6 months or 5 years as the case may be. Following the decisions of the Tribunal as above, the contention of the Appellant in this case that the demand is hit by limitation needs to be accepted. The impugned order is therefore set aside and the appeal is allowed.
Dictated in Court.