2008 (5) TMI 442 - HC - Central Excise

Cenvat credit - Rule 57-H of Central Excise Rules 1944 - notification. No. 20/89-CE(NT) dated 5-5-89 - With this amendment w.e.f. 5-5-89 the second limb of the proviso Rule 57-H(1)(ii) which provided for credit of the duty paid on inputs used in the manufacture of final products which are cleared from the factory on or after the 1 day of March 1987 was omitted - In term of amended Rule 57-H the credit of inputs used in the manufacture of final products which are cleared from the factojy on or after the 1st day of March 1987 was not admissible - claim for Modvat credit for the period 6-5-89 to 20-12-89 is not admissible due to amended provision of law prevalent during the period in this case as discussced above If under the statutory provision such credit was not permissible then the respondent was right to follow the aforesaid amended provision in deciding the issue of modvat credit - it was held that even after 5-5-1989 when the sub-rule was deleted from statute book petitioner was entitled for modvat credit. In absence of any specific direction in this regard the respondent while passing the order considered the amended Rule 57(H) and disallowing the modvat Credit in which no wilful disobedience is found - Petition is dismissed

Summary

Issues:
1. Allegation of non-compliance of court order dated 15-12-2000 in W.P. 4486/99.
2. Dispute over the claim of modvat credit for a specific period.
3. Contempt petition filed against the respondent for rejecting the claim.
4. Interpretation of court orders and legal provisions regarding modvat credit entitlement.

Issue 1: Allegation of Non-Compliance of Court Order:
The petitioner sought contempt proceedings against the respondent for alleged non-compliance of the court order dated 15-12-2000 in W.P. 4486/99. Despite previous orders affirming the directive, the respondent adjudicated the claim, allowing a partial amount and disallowing the rest, leading to the contempt petition.

Issue 2: Dispute Over Modvat Credit Claim:
The petitioner claimed entitlement to modvat credit for a specific period, arguing that the respondent's rejection was against the court's directive in the case of Gilt Pack Ltd. The respondent contended that the amendment to Rule 57(H) of the Central Excise Rules, 1944, rendered the modvat credit unavailable for the period in question, justifying the rejection.

Issue 3: Contempt Petition Disposition:
After a contempt petition was filed, the respondent reconsidered the claim and rejected it, prompting the petitioner to allege non-compliance with the court order. The respondent's decision was based on the interpretation of the law and the specific provisions governing modvat credit eligibility.

Issue 4: Interpretation of Court Orders and Legal Provisions:
The respondent argued that the court's orders did not explicitly grant modvat credit entitlement beyond a certain date due to the amendment in Rule 57(H). The respondent's decision to reject the claim was based on the amended provision, indicating no deliberate disobedience of court orders.

In conclusion, the judgment dismissed the petition for contempt proceedings, ruling that the respondent's rejection of the modvat credit claim was in accordance with the amended legal provisions and not a deliberate act of disobedience. The court emphasized the importance of following statutory provisions and interpreting court orders in line with the prevailing laws, ultimately finding no merit in initiating contempt proceedings against the respondent.