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1997 (7) TMI 312 - AT - Central ExciseModvat - Demand for recovery of credit wrongly availed of - Adjudication - Departmental clarification
Issues:
Whether the Assistant Collector is competent to disallow Modvat credit and recover the amount utilized under Rule 57-I. Analysis: The case involved a dispute regarding the availing of Modvat credit by the respondents, amounting to Rs. 62,902/- and Rs. 1,38,033/- in two separate instances. The respondents claimed that the Modvat credit was rightfully taken as they purchased materials from disposal yards of M/s. Bhilai Steel Plants. The Assistant Collector confirmed the demand for recovery of the credit. However, the Collector (Appeals) held that the Assistant Collector lacked the power to adjudicate the case due to exceeding the limit of Rs. 50,000/-. The Revenue appealed, arguing that Rule 57-I empowers the proper officer to disallow the credit and recover the amount utilized. The Tribunal noted that Rule 57-I specifically allows the proper officer to demand the amount utilized after disallowing wrongly taken Modvat credit. It was established that the Assistant Collector is considered the proper officer for this purpose, making him competent to decide on the issue. The Board's circular on monetary limits for adjudication does not apply when Rule 57-I is invoked. Since no penalty provision was invoked, the case fell within the ambit of Rule 57-I, not Section 11A. Therefore, the impugned order was set aside, and the appeal was allowed by remand to the Collector (Appeals) for reconsideration based on the law. In conclusion, the judgment clarified that the Assistant Collector is indeed competent to disallow wrongly taken Modvat credit and recover the amount utilized under Rule 57-I. The specific provisions of Rule 57-I dictate the authority of the proper officer, which includes the Assistant Collector. The case was remanded for further consideration by the Collector (Appeals) in accordance with the law, emphasizing the importance of the correct application of Rule 57-I in such matters.
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