2004 (6) TMI 186 - AT - Central Excise

Summary

Issues:
Dispute over quantum of duty credit eligibility on fuel (furnace oil) under Rule 57B.

Analysis:
1. The dispute revolves around the interpretation of Rule 57B regarding the eligibility of credit on specified duty paid on inputs. The assessee claimed 95% credit based on invoices, while the department sought to restrict it to 95% of 10% of the duty advancement mentioned in the invoices. The key issue is whether the restrictions under Rule 57A(3) apply to the entire Section VAA, including Rule 57B.

2. The Tribunal analyzed Rule 57B and concluded that it is a standalone provision in the Modvat Scheme. The rule allows for credit of 95% of the specified duty paid on inputs. The Tribunal emphasized that Rule 57B should be read independently of Rule 57A, especially considering the non obstante clause at the beginning of Rule 57B. The Tribunal referred to a Supreme Court decision to support this interpretation.

3. The Tribunal further clarified that there is no power under Rule 57B to restrict the credit beyond 95% of the duty paid as shown on the documents. The amendments to notifications under Rule 57A(3) do not apply to Rule 57B, especially after the introduction of a proviso clause in Rule 57B(1) specifying the credit eligibility. The Tribunal rejected the department's reliance on a previous case and emphasized that the law laid down in that case is not applicable post the amendments to Rule 57B.

4. The Tribunal highlighted that the legislative intent was to restrict credits on receipts post the specified date and not to impose retroactive restrictions. The Tribunal supported the appellant's argument based on a previous Tribunal order and concluded that the department had no grounds to restrict the credit beyond 95% of the duty shown on the documents. Consequently, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's reasoning behind its decision regarding the quantum of duty credit eligibility on fuel under Rule 57B.