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Issues:
1. Applicability of time-limit for notices issued to vary Modvat Credit. 2. Interpretation of Rule 57E in relation to time-limit for raising demands. 3. Consideration of Tribunal decisions in similar cases. 4. Review of Supreme Court decision on reasonable time-limit. 5. Referral of the case to a Larger Bench due to pending S.L.P. before the Supreme Court. Analysis: 1. The primary issue in this appeal is the determination of whether a time-limit of six months is applicable for notices issued to vary Modvat Credit due to changes in duty paid on inputs. The appellant's counsel argued that the absence of a specific time-limit in Rule 57E should be governed by the substantive provisions of limitation under Section 11A of the Central Excise Act, citing relevant Tribunal and Supreme Court judgments. The contention was that the notice issued was time-barred, and hence, the appeal should be allowed. 2. On the contrary, the Departmental Representative argued that the time-limit of six months only applies when provided for in the statute. It was emphasized that the notice was issued within a reasonable time after the Department became aware of the refund of duty to the manufacturers of inputs. The appellants were accused of withholding information, and Rule 57E was cited to support the reflection of duty refunds in Modvat Credit variations. The Department pleaded for the dismissal of the appeal. 3. The Tribunal considered the submissions and referenced previous decisions, including Bakesman Home Products and Arvind Detergents Ltd., to analyze the application of limitation in cases involving Modvat Credit variations. While acknowledging the relevance of the Supreme Court decision in Citadel Fine Pharmaceuticals, the Tribunal felt that further examination was necessary. It was highlighted that the starting point for limitation should be the grant of refund to the input supplier, not the date of taking Credit, as it affects the Modvat admissible. 4. Noting the complexity and importance of the issue, the Tribunal referred the case to a Larger Bench for review, especially in light of a Special Leave Petition filed before the Supreme Court involving a similar question of whether Section 11A would govern proviso 3 to Notification 201/79. The decision to refer the case was influenced by the need to reassess the applicability of time-bar for issuing demands related to varying Modvat Credits, pending the outcome of the Supreme Court's decision. This comprehensive analysis of the judgment provides a detailed overview of the issues, arguments presented by both parties, relevant legal interpretations, and the Tribunal's decision to refer the case to a Larger Bench for further review, ensuring a thorough understanding of the legal complexities involved in the appeal.
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