1997 (4) TMI 183 - AT - Central Excise

Summary

Issues:
1. Challenge to disallow money credit taken by respondents.
2. Time bar of the demand for duty.
3. Applicability of time limitation under Rule 57P.
4. Interpretation of reasonable time limit.
5. Submission of RT 12 return and RG 23B Part II to Range Officers.
6. Precedents supporting the lower appellate authority's decision.

Analysis:

Challenge to Disallow Money Credit:
The case involved a challenge by the Revenue regarding the money credit of Rs. 7,78,895 taken by the respondents on Minor Oils without filing a declaration before taking the credit in their RG 23B Part I and Part II account. The Department issued a show cause notice challenging the money credit taken during a specific period, which was later ordered to be recovered by the original authority.

Time Bar of the Demand:
The lower appellate authority allowed the appeal based on the time bar of the demand, citing that the show cause notice demanding duty was issued after the expiry of the six-month period stipulated under Section 11A of the Central Excises and Salt Act, 1944. This formed a crucial aspect of the appeal.

Applicability of Time Limitation under Rule 57P:
The Revenue argued that Rule 57P, which allows for the disallowance of money credit, does not specify any period of limitation. The contention was that the provision of Section 11A, which provides for a six-month time limit, cannot be directly applied to Rule 57P due to the absence of a specific time frame.

Interpretation of Reasonable Time Limit:
The respondent's advocate relied on the principle that where no time limit is prescribed, a reasonable time limit should be inferred. Citing a previous judgment, it was argued that a reasonable time limit had been correctly applied by the lower authority in issuing the show cause notice just before completion of five years.

Submission of RT 12 Return and RG 23B Part II:
It was highlighted that the respondents had duly informed the department about taking credit by submitting an RT 12 return along with a copy of RG 23B Part II to the Range Officers. This submission was crucial in determining the correctness of the time limit applied by the lower authority.

Precedents Supporting Lower Appellate Authority's Decision:
Various legal precedents were cited to support the lower appellate authority's decision, emphasizing the correct application of a reasonable time limit in similar cases. The consistency of this approach in previous judgments was a significant factor in upholding the lower authority's decision.

In conclusion, the appellate tribunal, after considering the arguments from both sides, agreed with the respondent's advocate and rejected the Revenue's appeal. The tribunal confirmed the lower appellate authority's order based on the interpretation of the reasonable time limit and the submission of relevant documents to the Range Officers.