1988 (10) TMI 216 - AT - Central Excise

Summary

Issues: Department's appeal against the order of the Collector (Appeals) regarding the maintenance of set off register for availing proforma credit under Notification No. 178/77 and Notification No. 201/79.

The judgment involves an appeal by the Department against the order of the Collector (Appeals) concerning the entitlement of proforma credit by the respondents, who are fertiliser manufacturers. The dispute revolves around the maintenance of the set off register for the period from 8-3-1979 to 3-6-1979. The Assistant Collector initially disallowed the credit due to the non-maintenance of the set off register during this period. However, the Collector (Appeals) overturned this decision, stating that the respondents had maintained accounts in R.G. 23 and followed all necessary procedures for the credits during this period. The appellate order also addressed the credit taken from 4-6-1979 to 9-9-1979, directing the respondents to approach the Central Excise Collector for restoration of credits taken prior to filing the required declaration under Notification No. 201/79. The Central Excise Collector later condoned the delay in filing the declaration, leading to the dropping of the demand against the firm. The Department's appeal was thus limited to the Collector (Appeals) order regarding the period when the set off register was not maintained, challenging the eligibility of the respondents for proforma credit under Notification No. 178/77.

The Department argued that the maintenance of the set off register was necessary for availing proforma credit under Notification No. 178/77, citing a Trade Notice by the Collector. They contended that even for availing proforma credit under Rule 56-A, the set off register must be maintained. However, the Tribunal disagreed with this argument, emphasizing that if the respondents were eligible to follow the procedure under Rule 56-A, which provides its own credit availment process, insisting on the maintenance of any other account for denying credit would be legally incorrect. The Tribunal found no merit in the Department's appeal and rejected it, affirming the Collector (Appeals) decision in favor of the respondents.

In conclusion, the Tribunal upheld the Collector (Appeals) order, ruling in favor of the respondents, the fertiliser manufacturers, in the dispute over the entitlement to proforma credit under Notification No. 178/77. The judgment clarified that adherence to the specific procedure outlined in Rule 56-A for credit availment rendered the maintenance of the set off register unnecessary, rejecting the Department's argument that the register was a prerequisite for availing proforma credit.