1997 (1) TMI 98 - HC - Central Excise

Summary

Issues Involved:
1. Limitation for filing refund claim.
2. Applicability of Modvat credit reversal.
3. Jurisdiction and maintainability of writ petition.

Summary:

1. Limitation for Filing Refund Claim:
The petitioner challenged an order dated 12th August 1994 by the Collector (Appeals), Customs & Central Excise, Ghaziabad, which dismissed the petitioner's appeal as barred by limitation. The petitioner, a manufacturer of audio cassettes, claimed a refund for a sum of Rs. 1,97,243.15 debited in the PLA account on 28-6-1990 and 2-7-1990, arguing that the deposit was without the authority of law. The Assistant Collector and the Collector (Appeals) rejected the claim on the grounds that it was not maintainable on merits and was barred by time u/s 11B of the Central Excise and Salt Act, 1944. The court held that the refund claim was indeed barred by time as it was filed after the expiry of six months from the relevant date.

2. Applicability of Modvat Credit Reversal:
The petitioner argued that the credit for duty paid on inputs, validly taken under the Modvat Scheme, could not be withdrawn due to the final product being exempt from duty. The court examined the relevant rules, including Rule 57A, Rule 57C, and Rule 57G, and concluded that Modvat credit is provisional until the inputs are used in accordance with the rules and excise duty on the final product is paid. The court held that the reversal of Modvat credit was implied from the purpose of the Scheme and the nature of the Rules, and that the debit entries made by the petitioner were in compliance with its legal obligation. The court rejected the argument that Modvat credit once availed is irrevocable, stating that such a view would amount to unjust enrichment.

3. Jurisdiction and Maintainability of Writ Petition:
The Union of India contended that the impugned order was appealable to the Customs Excise & Gold (Control) Appellate Tribunal (CEGAT) and that the petitioner had an alternative remedy, making the writ petition not maintainable. The court acknowledged that the plea of alternative remedy is not a complete bar to its jurisdiction under Article 226 of the Constitution of India. However, given the findings on the merits and the issue of limitation, the court dismissed the writ petition with costs.

Conclusion:
The court found no merit in the petitioner's claim for refund, holding that the claim was barred by time and that the reversal of Modvat credit was legally justified. The writ petition was dismissed with costs.