1991 (9) TMI 225 - AT - Central Excise

Summary

Issues:
1. Interpretation of duty payment method - RG 23A Part II vs. PLA register under MODVAT Scheme.

Detailed Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras involved a dispute regarding the method of discharging duty liability by the appellant. The central issue was whether the duty paid by the appellants through debit entries in RG 23A Part II for job work done for Tata Oil Mills was valid or if the duty should have been discharged by making debit entries in the statutory PLA register, as contended by the Department. The appellant argued that despite the absence of the MODVAT Scheme at the time of duty accrual, they should be allowed to use RG 23A Part II for duty payment due to subsequent developments. However, the Department maintained that the duty should have been paid through the PLA register as per the law in force at the time of duty accrual.

During the proceedings, it was established that the duty liability was not in dispute, with the mode of payment being the primary contention. The Tribunal noted that at the time when the duty liability accrued, the MODVAT Scheme was not in operation. Consequently, the Tribunal held that the Department's position, requiring duty payment through the PLA register, was justified based on the prevailing legal framework. As a result, the Tribunal upheld the Department's view and dismissed the appeal, emphasizing that the appellant's argument for using RG 23A Part II for duty payment was untenable given the absence of the MODVAT Scheme at the relevant time.

Additionally, in a separate judgment delivered by Member (T), it was clarified that under the MODVAT Scheme, the credit in RG 23A Part II could only be utilized for payment of duty concerning specified end products for which declarations were filed. The judgment highlighted that there was no provision for utilizing the credit for goods cleared before the Scheme's implementation. Since the appellant did not demonstrate that their finished products were eligible for MODVAT credit on inputs used, and considering the lack of retrospective application provision for credit utilization, the plea to allow the appellant's claim was dismissed. The judgment reinforced the strict application of MODVAT credit rules and upheld the decision to dismiss the appeal.

In conclusion, the Appellate Tribunal CEGAT, Madras resolved the dispute by affirming the Department's position on duty payment methodology, emphasizing adherence to the legal requirements in force at the time of duty accrual and underscoring the limitations on MODVAT credit utilization under the prevailing legal framework.