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TMI Blog1990 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant findings of the Assistant Collector and the Collector (Appeals) and argued that in this case the demand covered by Annexure C is the duty paid at a lower rate by mistake by the manufacturers of inputs, which amount was initially taken as credit and subsequently an objection was raised by the department for the correct applicable rate on the inputs and in pursuance of the demand, the differential duty was paid and credit was taken on the basis of the certificate of payment for the differential duty issued by the Excise Officer having jurisdiction over the manufacturer of inputs. This credit of duty subsequently taken on the strength of the certificate has been denied to them by the authorities below. In the case of Annexure E , the inputs were received under Chapter X procedure in terms of Not. 177/86, which was rescinded and was not available at the time of removal of the inputs and even the department were not aware of the rescinding of the Notification. Hence the inputs were continued to be removed under Chapter X procedure and were received by the appellants under AR-3A and GP.2. Subsequently, when this mistake was noticed, the manufacturers of inputs have paid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of duty as per the law, which by mistake had been paid at a lower rate. In the case of inputs covered by Annexure E to the show cause notice, they ought to have been removed on payment of duty but the input manufacturers, because of the fact that they were not aware of the rescinding of the exemption Notification, continued to remove the goods under AR-3A which is also a mistake. Subsequently, they have paid the duty as per the law and this duty could be taken as credit by the appellants in as much as all the inputs covered by both Annexure C E have already been declared in their declaration filed. He also relied on the judgment of the South Regional Bench in the case of Indo National Limited v. Collector of Central Excise, Hyderabad reported in 1989 (41) E.L.T. 422 (Tri.) = 1989 (13) ETR 545, wherein, the Tribunal have taken the view that for operation of Rule 57E, there should be a variation in the rate of duty payable in respect of input either by operation of law or otherwise and in the case before the Tribunal, there was no variation in regard to the duty payable on the inputs in question and the same continued to be of 20% right through. Merely because the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing for such contingency only from 1-3-1987 and also by another amendment on 15-4-1987. Since the inputs have been received prior to this amendment, the benefit of amendment cannot be availed of retrospectively. He, therefore, supported the order of the Collector (Appeals) on merits. 5. However, on the ground of time bar, he pleaded that Rule 57-I did not prescribe any time limit. In this case, Sec. 11A is not applicable because it deals with recovery of duties not levied or not paid or short-levied or short paid or erroneously refunded, whereas, Rule 57-I is specifically relating to recovery of credit wrongly availed of. Moreover, in the instant case, the Assistant Collector, after observing the principles of natural justice by way of issue of show cause notice has confirmed the demand. He, however, fairly conceded that the Tribunal has been taking the view that even during the period when no time limit was prescribed under Rule 57-I, it has to be read in conjunction with Sec. 11A and the demand has to be issued within a period of six months. 6. After hearing both sides, we find that the issue to be decided on merits in the case of the appeal filed by M/s. Mahindra M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Rule 57-E as it then stood in the relevant date is as follows: Adjustments in duty credit - If duty paid on any inputs in respect of which credit has been allowed under rule in respect of which credit has been allowed under Rule 57-A, is varied subsequently due to any reason resulting in payment of refund to the manufacturer or the importer of the inputs, the credit if allowed shall be varied accordingly by adjustment in the credit-account maintained under Rule 9 or sub-rule (1) of Rule 173G or, if such adjustment is not possible for any reason, by cash recovery from the manufacturer availing of credit under Rule 57-A . On consideration of the above rule, we are of the view that there should be a variation in the rate of duty payable in respect of the input either by operation of law or by otherwise and in the present case it cannot be disputed that there was no variation in regard to the duty payable for the input in question and the same continued to be at 20% right through. Merely because the supplier committed a mistake in not clearing the input by paying 20% duty and paid only 12% duty and subsequently paid the differential duty of 8%, it would not amount to variation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt maintained under sub-rule (3) of Rule 57A or in the accounts maintained under Rule 9 of sub-rule (1) of Rule 173G or, if such adjustment is not possible for any reason by cash recovery from the manufacturer availing of credit under Rule 57A . 8. Rule 57E as finally amended by Notification No. 117/87 dated 15th April, 1987 reads as below: If duty paid on any inputs in respect of which credit has been allowed under Rule 57A, is varied subsequently due to any reason resulting in payment of refund to, or recovery of more duty from, the manufacturer or importer as the case may be, of such input is, the .credit allowed shall be varied accordingly, by adjustment in the credit account maintained under sub-rule (3) of Rule 57G or in the account maintained under Rule 9 or sub rule (1) of Rule 173G, or if such adjustment is not possible for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the credit under Rule 57A". 9. From the above it is clearly evident that during the material period when the inputs were received and credit of duty was taken on these inputs, there was no enabling provision in the modvat scheme permitting taking more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclude that the Policy Makers did not provide for such contingencies for reasons best known to them. It is,not open to us to read more than what is specified in the Rules. Presumably because of the representations on this score. Rule 57E appears to have been modified providing for variation in the credit on ground of refund of input duty or enhancement of input duty due to demand. It is a settled law that the authorities functioning under the statute are to go by the provisions of the Rules and cannot be expected to supplement or add to the rules, where they do not exist. 10. The learned advocate has also cited two more judgments in the case of Collector of Central Excise v. Madras Rubber Factory reported in 1987 (32) E.L.T. 579 (Tri.) and H.S.S. Karkhane Niyamit Sankeshwar v. Collector of Central Excise, Belgaum reported in 1989 (13) ETR 382. We have carefully gone through the two judgments. Both the judgments relate to the question of extension of the benefit of Notification No. 201/79 and 118/75. In both the cases, though the procedure prescribed under the Notification is not technically followed, so long as it is established that they have substantially complied with the N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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