1989 (12) TMI 183 - AT - Central Excise

Summary

Issues:
1. Applicability of time limit for rectification of Modvat credit wrongly availed.
2. Interpretation of provisions of Section 11A and Rule 57-I in relation to Modvat credit.
3. Clarification on Modvat credit admissibility for tool kits and jack assembly supplied with motor vehicles.

Detailed Analysis:
1. The judgment involves three stay petitions and corresponding appeals filed by the Collector of Central Excise, Patna, challenging orders passed by the Collector of Central Excise (Appeals), Calcutta. The Collector of Central Excise (Appeals) allowed the appeals filed by M/s. Telco, Jamshedpur, holding that the disallowance of Modvat Credit for hydraulic jacks and tool kits supplied with motor vehicles was not in order due to the expiration of the time limit prescribed under Section 11A. The appellant argued that rectification of wrongly availed Modvat credit is separately provided for in Rule 57-I, and the time limit under Section 11A should not apply in this case.

2. The appellant contended that the time limit for wrong availment of Modvat Credit was introduced in Rule 57-I from a specific date, and as the appeals in question pertained to cases before that date, they should not be restricted by the time limit. The appellant also argued that Section 11A and Rule 57-I are independent provisions with different scopes of application. The appellant emphasized that allowing the appeals would have a recurring effect on revenue collection.

3. The respondent presented a trade notice clarifying the admissibility of Modvat credit for tool kits and jack assembly supplied with motor vehicles, subject to certain conditions. The respondent provided evidence that they were permitted to avail of Modvat Credit for tool kits/jack assembly based on the trade notice and a clarification from the Pune Central Excise Collectorate. The respondent highlighted that the recovery of incorrect Modvat Credit under Rule 57-I could be subject to the time limit prescribed in Section 11A, as decided in a Collector's Conference. The Tribunal upheld the decision of the Collector (Appeals) to apply the provisions of Section 11A in these cases, leading to the dismissal of the appeals filed by the Collector of Central Excise, Patna.

In conclusion, the judgment addressed the issues of time limit applicability for rectification of Modvat credit, interpretation of Section 11A and Rule 57-I in relation to Modvat credit, and the admissibility of Modvat credit for tool kits and jack assembly supplied with motor vehicles. The Tribunal upheld the decision to apply the time limit under Section 11A in cases of incorrect Modvat Credit under Rule 57-I, leading to the dismissal of the appeals filed by the Collector of Central Excise, Patna.