2013 (7) TMI 158 - HC - Central Excise

Denial of modvat credit on the ground that the same was claimed beyond the period of six months - Second proviso of Rule 57G of the Rules provides that the manufacture shall not take credit after six months of the date of issue of any of the documents specified in the first proviso to this sub-rule - Assessee applied modvat credit for the first time in its notification on 4-9-1996 i.e., during the year in which modvat credit was claimed under the provision contained in Rule 57H. - Held that - Under Rule 57H of the Rules, there is no provision for claiming such modvat credit beyond the period of six months from the date of issuance of documents. The aforesaid rule begins with the non obstante clause Notwithstanding anything contained in Rule 57G , meaning thereby that the provision of Rule 57G of the Rules were specifically excluded from the provision of Rule 57H and nothing contained in Rule 57G of the Rules was applicable for the applicability of Rule 57H - Denial of modvat credit to the assessee merely on the ground that the same was claimed beyond the period of six months was not justified. - Decided against the Revenue.

Summary

Issues:
Interpretation of Rule 57G and Rule 57H of the Central Excise Rules, 1944 regarding the eligibility for modvat credit beyond six months from the date of issuance of documents.

Analysis:
The case involved an application by the Commissioner, Central Excise, Bhopal under Section 35(H) of the Central Excise Act, 1944, seeking a direction to the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi to refer a question to the High Court. The question raised was whether Rule 57G can be applied to cases covered by Rule 57H of the Central Excise Rules, 1944. The dispute arose from a claim for modvat credit by M/s Raymonds Ltd. Sausar, which was initially rejected by the Assessing Officer under Rule 57G due to the documents being over six months old. However, the Commissioner (Appeals) and the Tribunal allowed the claim under Rule 57H, which starts with a non obstante clause excluding the application of Rule 57G.

The core contention was whether the denial of modvat credit by the Assessing Officer based on the six-month limit under Rule 57G was justified. The Tribunal held that Rule 57H, being a transitional provision, overrides Rule 57G as it begins with a non obstante clause. This clause is intended to give overriding effect to the provision in case of a conflict. The judgment cited legal precedents to support the interpretation of non obstante clauses in statutory provisions. Ultimately, the High Court found no error in the impugned order and dismissed the application under Section 35(H) of the Central Excise Act, 1944, ruling that there was no merit in referring any question of law to the Court. No costs were awarded in the matter.