1993 (2) TMI 214 - AT - Central Excise

Summary

Issues: Appeal against order-in-appeal regarding Modvat scheme and transfer of credit from proforma account to Modvat account.

In this case, the appellants, manufacturers of aluminum articles, switched from proforma credit to the Modvat scheme. The dispute arose from the receipt of 4 consignments of inputs with a short levy initially, later rectified by the supplier paying differential duty. The appellants claimed additional credit based on this payment. The Assistant Collector denied the credit transfer for duty paid before January 31, 1986, citing Rule 57H. The Collector (Appeals) upheld this decision, stating no provision in the Modvat Rules allowed additional credit for short levy payments post the initial duty payment. The Tribunal analyzed Rule 57H's exception for inputs eligible for credit before March 1, 1986, finding the Assistant Collector's objection invalid. The Tribunal noted the appellants' early application for additional credit in the proforma account pre-switch to Modvat. Had this application been processed, the credit would have been available for transfer under Rule 57E. As a result, the Tribunal allowed the appeal, directing restoration of the disallowed credit in the Modvat account, rejecting the lower authorities' objections and decisions.