1994 (8) TMI 143 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57G(2) proviso regarding the Central Government's power to specify the date for facility applicability.
2. Disallowance of deemed Modvat credit on M.S. Sheets and imposition of penalty.

Analysis:

Issue 1: Interpretation of Rule 57G(2) proviso
The appeal was filed against the order passed by the Collector (Appeals) concerning the interpretation of Rule 57G(2) proviso. The Collector held that the Central Government has the authority to specify the date from which a particular facility will be applicable, and once specified, it must be enforced from that date, regardless of when it is communicated to the public. The Tribunal upheld the Collector's decision, emphasizing that the specified date in a direction by the Central Government must be adhered to, even if not immediately circulated. The judgment clarified that the withdrawal of a facility must also be effective from the specified date, maintaining the sanctity of the directive without allowing subordinate authorities to alter the effective date.

Issue 2: Disallowance of deemed Modvat credit on M.S. Sheets
The appellant, engaged in General Fabrication Work, claimed deemed Modvat credit on M.S. Sheets purchased between specific dates. However, the Ministry of Finance withdrew this facility w.e.f. a certain date. The appellant failed to reverse the wrongly availed credit or appeal the decision, leading to a show cause notice for disallowance of the credit. The appellant argued that the withdrawal should only be effective from the date it was made known to the public. Citing relevant cases, the appellant contended that the withdrawal should be deemed effective from the date of issuance of the Trade Notice by the Central Excise Collectorate. The Tribunal, considering the precedents and arguments, ruled in favor of the appellant, stating that the withdrawal of the credit facility should be applicable from the date of issuance of the Trade Notice, thereby disallowing the credit only from that specific date.

In conclusion, the Tribunal modified the order to disallow the deemed Modvat credit from the date of the Trade Notice, while rejecting the penalty imposition for non-deposit of the demanded amount. The rest of the impugned orders were confirmed, and the appeal was disposed of accordingly.