1985 (9) TMI 341 - AT - Central Excise

Summary

Issues:
1. Disallowance of credit by the Assistant Collector of Central Excise.
2. Applicability of Section 11A of the Central Excises and Salt Act, 1944.
3. Interpretation of Notification No. 201/79 regarding recouping of credits.

Analysis:
The judgment deals with the appeal against the order of the Collector of Central Excise (Appeals) disallowing a credit taken by the appellant in the R.G. 23 - Part II Register. The credit was disallowed by the Assistant Collector of Central Excise as the appellant failed to follow the procedures outlined in Notification No. 201/79. The appellant had taken the credit after Shriram Rayons, the supplier, paid duty on the goods received by the appellant. The Assistant Collector observed that the necessary procedures, such as giving intimation to the Department and verifying the goods, were not followed due to the absence of an effective levy of excise duty on tyre cord fabrics at that time.

The appellant cited a decision of the West Regional Bench of the Tribunal in a similar case, but the basis of the decision was not elaborated. The Tribunal, consisting of Members C.T.A. Pillai and S. Kalyanam, analyzed the applicability of Section 11A of the Central Excises and Salt Act, 1944. They noted that Section 11A pertains to duty of excise that has not been levied, paid, short levied, short paid, or erroneously refunded. In this case, the issue was the recoupment of credits taken wrongly, not a duty that was not levied or paid. The Tribunal also compared the provisions of Rule 56A of the Central Excise Rules, which specify a time limit for recouping credits allowed wrongly, unlike Notification No. 201/79.

The Tribunal concluded that Section 11A did not seem to apply to the situation at hand, as the notification provided for recouping credits taken by a manufacturer wrongly without specifying a time limit. Despite a previous decision by the West Regional Bench suggesting otherwise, the Tribunal directed the papers to be placed before the President to consider forming a larger Bench to hear the appeal, indicating a divergence in interpretation within the Tribunal.