2017 (2) TMI 571 - AT - Central Excise

Challenge of amendment to Rule 57S - Unutilised Cenvat credit - The learned DR submitted that both the authorities below have wrongly applied the principles of res judicata and that inasmuch as the Notifications 33/1997 and 34/1997-C.E. (N.T.) both dated 1-8-1997, were in force and has never been quashed or declared ultra vires by any Court, the orders of the authorities below deserve to be quashed - Held that - After the amendment, the capital goods were to be used in the manufacture of final products for which the duty was to be paid as per the provisions of Section 3A for which Cenvat credit on capital goods were not allowed - A straight forward reading of the Notifications 33/1997 and 34/1997-C.E. (N.T.) both dated 1-8-1997 and application of the same would result in the Cenvat credit available in the capital goods account of the respondent on 31-7-1997 to lapse. We also note this Tribunal is a creation of the statute and its mandate is to decide disputes arising in the implementation of the statute within its purview. This Tribunal cannot arrogate to itself any of the extraordinary powers bestowed upon the Hon ble High Courts and the Supreme Court by the Constitution - Appeal allowed - decided against the assessee.

Summary

Issues:
1. Validity of Rule 57S amendment and lapsing of Modvat credit under Notifications 33/1997 and 34/1997-C.E. (N.T.).
2. Application of Eicher Motors case principles to the present case.
3. Interpretation of the High Court's directions and compliance by lower authorities.
4. Use of res judicata principle in the context of the Eicher Motors case.
5. Tribunal's authority in deciding disputes within statutory purview.

Detailed Analysis:
Issue 1: The respondent challenged the amendment to Rule 57S, which led to the lapsing of unutilized Modvat credit under Notifications 33/1997 and 34/1997-C.E. (N.T.). The High Court remitted the matter back to the Assistant Commissioner for fresh order regarding excise duty liability in light of Eicher Motors case.

Issue 2: The Revenue argued that the Eicher Motors case did not address the validity of the notifications in question. The case dealt with inputs already used before the amendment, while in the present case, the capital goods were available post-amendment. The Tribunal noted that the Eicher Motors case did not cover the compounded levy scheme under Section 3A.

Issue 3: The lower authorities passed orders in compliance with the High Court's directions, which the respondent argued should be upheld. However, the Tribunal emphasized its role in deciding disputes within statutory purview and the need to interpret the notifications independently.

Issue 4: The Tribunal rejected the application of res judicata to apply the Eicher Motors case principles, emphasizing the need to analyze the specific notifications in question. The Tribunal concluded that the Modvat credit would lapse based on a straightforward reading of the notifications.

Issue 5: The Tribunal clarified its limited authority compared to High Courts and the Supreme Court, highlighting the need to focus on interpreting the relevant statutory provisions. Consequently, the Tribunal set aside the lower authorities' decision and allowed the appeal filed by the Revenue.

Overall, the Tribunal's decision focused on the specific provisions of the notifications and the distinct circumstances of the case, emphasizing the need for independent interpretation within the statutory framework.