1991 (6) TMI 165 - AT - Central Excise

Issues Involved:
1. Entitlement to refund of duty paid by suppliers on inputs under Notification No. 201/79.
2. Permissibility of credit of duty under Notification No. 201/79 when the manufacturer paid duty under protest.
3. Refund claims for duty paid on inputs utilized by the appellant.
4. Set-off claims on Calcium Carbonate sludge and Phospho Gypsum.
5. Utilization of credit balance post-rescission of Notification No. 201/79.

Issue-wise Detailed Analysis:

1. Entitlement to Refund of Duty Paid by Suppliers on Inputs under Notification No. 201/79:
The primary issue revolves around whether M/s. ACC is entitled to a refund of duty paid by their suppliers, M/s. TISCO, on blast furnace slag under Notification No. 201/79-C.E. The Tribunal noted that M/s. TISCO paid duty under protest due to a dispute regarding the excisability of blast furnace slag. The Tribunal had previously ruled that blast furnace slag was not excisable, and the Supreme Court dismissed the Revenue's appeal as time-barred, making the Tribunal's order final. Consequently, since the duty paid by M/s. TISCO was refundable, M/s. ACC could not claim credit for the duty on non-excisable goods. Therefore, M/s. ACC had no case for credit of duty as the goods were not liable to duty.

2. Permissibility of Credit of Duty under Notification No. 201/79 When the Manufacturer Paid Duty Under Protest:
The Tribunal considered whether credit of duty was permissible under Notification No. 201/79 when the manufacturer (M/s. TISCO) paid the duty under protest. Given that the Tribunal's order declared blast furnace slag non-excisable, the duty paid by M/s. TISCO was refundable. Hence, the question of availing set-off by M/s. ACC did not arise as the goods were not liable to duty.

3. Refund Claims for Duty Paid on Inputs Utilized by the Appellant:
M/s. ACC filed claims for a refund of duty paid by M/s. TISCO on blast furnace slag, which was rejected by the Assistant Collector and subsequently by the Collector (Appeals) in two cases. In the third case, the Collector (Appeals) allowed the refund in favor of M/s. ACC. The Tribunal upheld the rejection in the first two cases, reiterating that no duty was payable on the non-excisable goods, and thus, no credit could be claimed.

4. Set-off Claims on Calcium Carbonate Sludge and Phospho Gypsum:
In the second appeal, M/s. ACC claimed set-off on Calcium Carbonate sludge and Phospho Gypsum supplied by the Sindri Fertiliser Plant. The authorities rejected the refund claims based on Clause 9(b) of Notification No. 201/79, which prohibits refund in cash or cheque. The Tribunal upheld the lower authorities' rejection, emphasizing the specific condition in the notification. However, the Tribunal suggested that the authorities should entertain the set-off claims if the conditions prescribed in Notification No. 201/79 were fulfilled and decide the matter expeditiously.

5. Utilization of Credit Balance Post-Rescission of Notification No. 201/79:
The fourth appeal involved the utilization of a credit balance of Rs. 10,23,243.88 lying in RG-23 Part II after the rescission of Notification No. 201/79 on 1-3-1986. The Assistant Collector concluded that the unutilized credit lapsed with the introduction of the Modvat Scheme. However, the Collector (Appeals) accepted M/s. ACC's contention that the unutilized credit represented a right accrued before the rescission and could not lapse under Section 6(c) of the General Clauses Act, 1897. The Tribunal disagreed, stating that once the exemption notification was rescinded, the unutilized credit could not confer any benefit, and no refund could be given as per the notification's terms. The Tribunal emphasized that the exemption withdrawal meant the goods became liable to duty at the tariff rate, and the unutilized credit could not be utilized for availing of the exemption.

Conclusion:
The Tribunal rejected all appeals except for the modification regarding the set-off claims on Calcium Carbonate sludge and Phospho Gypsum, which should be entertained if conditions are met. The authorities were urged to finalize the claim within three months.

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