9911796707
TMI Blog1990 (2) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... ., during the period 1979 to 1984 and credit of duty was availed by the appellants in terms of Notification No. 201/79-C.E., dated 04-06-1979. Subsequently, consequent to the decision of the Delhi High Court completely exempting the product, in the case of M/s. Barmalt (India) Pvt. Ltd., the suppliers M/s. Malt Company (India) Pvt. Ltd. was granted a refund of Rs. 1,24,62,712.25 for the Malt Extract cleared during the period from 1977 to 1985. In view of the complete exemption granted to the input, the appellants were put on notice by the Assistant Collector of Central Excise, Patiala Division, and the amount of credit ofRs. 41,067.93 availed as set-off by the appellant was demanded and confirmed and the Collector (Appeals) upheld the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty taken by the appellant in terms of Notification No. 201/79-C.E. Here the Assistant Collector has had no knowledge prior to the taking of credit of the input viz. Malt Extract, that it will be rendered non-dutiable, at the relevant time, the input was duty paid and hence credit was allowed. But consequent on decision, the input was not dutiable and the refund allowed rendered it a non-duty paid item. The proviso 3 of Notification No. 201/79-C.E. is relevant which reads as follows:- If the duty paid on the inputs (on which credit has been taken) is varied subsequently due to any reason resulting in payment of refund to, or recovery of more duty from, the manufacturer of the inputs, the credit taken shall be varied accordingly by ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken, the department had allowed the same rightly as the input was duty paid. It was only after the decision of the Delhi High Court that the Malt Extract was exempted and a refund of the duty was granted to the manufacturers of the Malt Extract for the period from 1977 to 1985. There arises a peculiar situation that it was not within the knowledge of the department that the input will be exempted. There was neither a wrong or erroneous credit at the time when the credit was availed by the appellant. So when the amount of refund was paid to the input manufacturers, the appellants were not entitled to the credit of duty availed and should have paid back to the department. On the other hand, if the department was to raise the demand, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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