1992 (3) TMI 204 - AT - Central Excise

Issues:
1. Time-barred nature of the demand for recovery of Modvat credit under Rule 57-1 of the Central Excise Rules, 1944 and Section 11A of the Central Excises & Salt Act, 1944.
2. Applicability of higher notional credit for Special Excise Duty under Rule 57B and Notification No. 175/86-C.E., dated 1-3-1986.
3. Maintainability of the appeal based on the grounds stated in the authorization by the Collector.

Analysis:

Issue 1: Time-barred nature of the demand
The appeal was filed against the Order-in-Appeal where the Collector of Central Excise (Appeals) had allowed the appeal of M/s. Hindustan Motors Limited, holding that the demand for recovery of Modvat credit was time-barred under Rule 57-1 of the Central Excise Rules, 1944 and Section 11A of the Central Excises & Salt Act, 1944. The appellant argued that the Order-in-Appeal should be set aside as it was contended that higher notional credit for Special Excise Duty may exceed what is leviable under the Finance Act, 1988. However, the Tribunal found that the appeal did not challenge the time-bar aspect of the demand, which was the basis of the Collector (Appeals) decision. As a result, the Tribunal dismissed the appeal due to the lack of merit in challenging the time-barred nature of the demand.

Issue 2: Applicability of higher notional credit for Special Excise Duty
The appellant raised concerns regarding the allowance of higher notional credit for Special Excise Duty under Rule 57B and Notification No. 175/86-C.E., dated 1-3-1986. It was argued that the benefit of higher notional credit was limited to Basic Excise Duty alone as per the specific provisions of the notification issued under Rule 8(1). The appellant contended that allowing higher credit for Special Excise Duty might result in exceeding the limits set by the Finance Act, 1988. However, the Tribunal did not consider this argument as the appeal did not challenge the time-bar aspect of the demand, which was the primary basis of the Collector (Appeals) decision. Therefore, the Tribunal did not delve into the issue of higher notional credit applicability.

Issue 3: Maintainability of the appeal
The respondents argued that the appeal was not maintainable as the Collector (Appeals) had allowed their appeal on the grounds of time-bar, which was not challenged in the appeal. The authorization for filing the appeal by the Collector only referred to the grounds related to the higher notional credit for Special Excise Duty. The Tribunal referred to previous decisions and emphasized that the appeal should be confined to the grounds stated in the authorization. Since the appeal did not challenge the time-bar aspect of the demand, the Tribunal found no merit in the appeal and dismissed it based on the lack of grounds challenging the time-barred nature of the demand.

In conclusion, the Tribunal dismissed the appeal filed by the Collector of Central Excise, Calcutta-11 against the Order-in-Appeal, emphasizing that the appeal did not challenge the time-barred nature of the demand, which was the primary basis of the decision by the Collector (Appeals). The Tribunal did not address the issue of the applicability of higher notional credit for Special Excise Duty as it was not the basis of the Collector (Appeals) decision or the appeal grounds.

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