1987 (1) TMI 287 - AT - Central Excise

Summary

Issues:
1. Admissibility of set-off under Notification 201/79-C.E.
2. Validity of demand under Rule 10 after its omission and introduction of Section 11A.
3. Applicability of the decision of the Allahabad High Court regarding retrospective effect of Section 11A.
4. Consideration of conflicting judgments from different High Courts on the issue of retrospective application of Section 11A.
5. Effect of the deletion of Rule 10 on ongoing proceedings and the authority to continue under Section 11A.

Detailed Analysis:

1. The appellants, manufacturers of watches, availed proforma credit and set-off of countervailing duty under Notification 210/79-C.E. for watches assembled from imported parts. A demand was raised due to erroneous application of the duty under a different tariff item. The Collector (Appeals) held the set-off inapplicable under the notification. The appellants contested the demand stating it was not covered under Rule 10 or Section 11A, emphasizing departmental permission for the credit.

2. The Assistant Collector rejected the appellants' submission, confirming the demand. The Collector (Appeals) upheld the demand under Rule 10 despite its omission and the introduction of Section 11A. The appellants argued that Section 11A lacked a saving clause for retrospective application, citing a decision of the Allahabad High Court regarding the rescission of Rule 10.

3. The appellants relied on the Allahabad High Court's ruling, emphasizing the absence of a saving clause in Section 11A for past cases. The department contended that the set-off was wrongly availed, citing precedents supporting reassessment even with departmental concurrence. The Tribunal considered the issue of limitation based on previous rulings and the effect of Rule 10's deletion.

4. The Tribunal analyzed conflicting judgments from different High Courts on the retrospective application of Section 11A. It highlighted the Madhya Pradesh High Court's decision supporting the continuation of proceedings under Section 11A despite the omission of Rule 10. The Tribunal emphasized the applicability of the Madhya Pradesh High Court's ruling to the present case, disregarding the jurisdictional differences.

5. Following the principle that the Tribunal can consider conflicting High Court judgments and apply the most suitable authority, the Tribunal concluded that proceedings could proceed under Section 11A. The demand raised was deemed confirmable under Section 11A of the Central Excises and Salt Act, leading to the rejection of the appeal.