1990 (8) TMI 274 - AT - Central Excise

Summary

Issues involved:
The appeal concerns the eligibility of the respondents to take additional MODVAT credit after realizing they had initially taken a lower credit upon receipt of goods in the factory.

Summary:

1. Collector's Order vs. Appeal Decision:
The Collector of Central Excise, Bangalore, appealed against the Collector of Central Excise (Appeals), Madras' decision allowing the respondents to claim additional MODVAT credit. The Collector (Appeals) held that in the absence of restrictions in the Central Excise Rules, the respondents were entitled to correct their credit amount after receiving the goods. The appeal was allowed based on this reasoning.

2. Grounds of Appeal by Appellant-Collector:
The Appellant-Collector argued that the decision was legally incorrect as there were no provisions allowing for the availing of differential higher credit at a later date under Rule 57B and Notification No. 175/86. The appellant contended that the rules did not permit such irregular credit availment, and any differential credit taken later should be reversed or recovered under Rule 57-1.

3. Department's Position:
The Department reiterated the grounds of appeal presented by the Appellant-Collector.

4. Tribunal's Decision and Reasoning:
The Tribunal noted that while Rule 57-1 allowed for reversal of wrong MODVAT credit, there was no specific provision for taking additional credit when a short credit had been initially taken. However, the Tribunal emphasized the benevolent nature of the legislation, allowing for set-off of duty paid on inputs through credit. The respondents were found eligible to take the additional credit under Rule 57B within a reasonable time, as long as all eligibility criteria were met. The Tribunal dismissed the appeal, stating that the right conferred on the respondents under Rule 57A and Rule 57B could not be denied unless lapsed due to limitation, which was not the case here. The appeal by the Department was thus dismissed.