2004 (2) TMI 617 - AT - Central Excise

Summary

Issues:
Challenge to the lapsing of Modvat Credit under sub-rule (7A) of Rule 57H of the Central Excise Rules, 1944.

Analysis:
The appeal was filed against the lapsing of Modvat Credit by M/s. Jai Bharat Fabrics Mills Ltd. under sub-rule (7A) of Rule 57H of the Central Excise Rules, 1944. The Appellants challenged the vires of this sub-rule inserted by Notification No. 11/2000-C.E. (N.T.), dated 1-3-2000. The contention was that the Modvat Credit, legally accrued to them, should not be allowed to lapse due to the insertion of this sub-rule. Reference was made to the Supreme Court's decision in the case of Eicher Motor Ltd. v. UOI, emphasizing that altering a scheme affecting accrued rights is impermissible. The Appellants argued that Section 37 of the Central Excise Act does not authorize the authority to make rules for lapsing Modvat accounts, citing the decision in the case of Sankeswar Fabrics (P) Ltd. v. UOI.

The Respondent argued that the Notification was issued under the power conferred by Section 37 of the Act and that the Appellate Tribunal, being a creature of the statute, cannot question the vires of provisions made under the Act. Citing the decision in the case of Miles India Ltd. v. Asstt. Collector of Customs, it was emphasized that authorities must abide by the provisions of the Act. The Respondent highlighted that if a duty was paid under a mistake of law, alternative remedies could be sought.

The Tribunal noted that it cannot question the vires of a rule framed under the Central Excise Act, as established by previous judgments. Referring to the decision in the case of CCE, Chandigarh v. Doaba Co-operative Sugar Mills, it was reiterated that authorities must adhere to the provisions and limitations prescribed in the Act. The Tribunal emphasized that while the Supreme Court and High Court can review the vires of legal provisions, the Appellate Tribunal cannot. Consequently, the appeal was found to lack merit and was rejected.

In conclusion, the Tribunal upheld the lapsing of Modvat Credit under sub-rule (7A) of Rule 57H, emphasizing the limitations on the Tribunal's authority to question the vires of provisions under the Central Excise Act. The decision was based on the principle that authorities must adhere to the statutory provisions and limitations prescribed by the Act, as established by previous legal precedents.