1995 (7) TMI 228 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 57B of the Central Excise Rules, 1944 regarding the eligibility to take notional higher credit within a specific time limit.

Analysis:
The case involved a Reference Application by the Collector of Central Excise, Jamshedpur, questioning the Tribunal's decision allowing the respondent company to take differential notional higher credit within six months of receipt of inputs. The respondents did not initially take the higher credit but later claimed it upon realizing the eligibility due to the supplier's small-scale manufacturer status. The Tribunal, relying on precedent, permitted the credit, leading to the Collector's appeal. The Collector argued that the issue of notional higher credit eligibility within a time limit is a question of law under Rule 57B and Section 11B of the Central Excises and Salt Act, 1944, citing relevant case laws.

The respondent's counsel contended that no legal issue existed, emphasizing the acceptance of their main contention by the Department that the final product was not dutiable if made from duty-paid inputs. They also argued that the Collector's objection was not about credit admissibility but the time limit under Section 11B, citing a Supreme Court ruling on reasonable time limits. The counsel asserted that the matter was settled law and did not warrant High Court reference.

The presiding judge, after considering both arguments, concluded that the issue did not involve a question of law. The judge noted that Rule 57B does not prohibit taking notional higher credit, and the reasonableness of the time limit for claiming it is a factual determination. Citing the Supreme Court's precedent on reasonable time limits, the judge rejected the Reference Application, stating that the matter was factual and not a legal interpretation of Rule 57B.

In summary, the judgment addressed the interpretation of Rule 57B and the eligibility to claim notional higher credit within a specific time limit. The Tribunal's decision allowing the credit was upheld, emphasizing the factual nature of determining a reasonable time limit rather than a legal question. The judgment clarified that Rule 57B does not restrict claiming notional higher credit, and the matter was settled based on factual considerations and Supreme Court precedent on reasonable time limits.