1991 (9) TMI 169 - AT - Central Excise

Summary

Issues:
1. Eligibility for benefit under Rule 57H(3) of the Modvat Scheme.
2. Transfer of proforma credit under Rule 56A to RG 23A for Modvat purposes.

Analysis:

Issue 1:
The appeal questioned the eligibility of the appellants for the benefit of Rule 57H(3) under the Modvat Scheme. Initially, the goods were assessed under a category not covered by the Modvat Scheme but later reclassified to fall under a category covered by the Scheme. The appellants claimed credit under Rule 56A until the reclassification. The lower authorities held that the credit remaining unutilized after a certain date could not be transferred. The appellants argued that they were forced to change their classification due to the authorities' actions and should be allowed the benefit of the transfer based on previous Tribunal decisions.

Issue 2:
The primary contention was whether the appellants could transfer their outstanding credit from RG 23 to RG 23A for Modvat purposes. The lower appellate authority relied on Rule 57H(3) as it stood at the time of consideration, stating that the amended sub-rule could not be applied retrospectively. The Special Bench of the Tribunal cited the principle of "lex non cogit ad impossibilia" and held that the appellants should not be denied the benefit of the notification due to the authorities' actions. The Tribunal found that the appellants became eligible for the Modvat Scheme later and should be allowed the transfer of proforma credit based on the interpretation of the statute and previous rulings.

In conclusion, the Tribunal allowed the appeal, emphasizing that the appellants should not be disadvantaged due to the authorities' actions in changing the classification of goods. The interpretation of Rule 57H(3) at the relevant time was to permit the transfer of proforma credit when assesses became eligible for the Modvat Scheme, which applied in the appellants' case. The Tribunal applied the principles from previous rulings and allowed the transfer of proforma credit from RG 23 to RG 23A for Modvat purposes, ruling in favor of the appellants.