9911796707
TMI Blog1990 (4) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... importing CRNGO sheets. Part of this sheets were supplied to M/s. Kelvinator of India Limited. M/s. Kelvinator of India availing of proforma credit in respect of the duty paid on the sheets and utilising the said sheets in the manufacture of laminations. Even the laminations were cleared on payment of duty on the basis of the value worked out on costing inclusive of raw materials and labour charges. The duty paid sheets and laminations received by the appellants for use in the manufacture of stators and rotors was under Rule 56A of the Central Excise Rules and credit of the duty on sheets and laminations was taken in the proforma account. This was the position up to 1-3-1986 when in the 1986 Budget, the Modvat scheme was introduced. Consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector and accordingly, he allowed the transfer of the credit under Rule 57H(3) to the modvat account. Against this order, the Department went in appeal before the Collector of Central Excise (Appeals). The Collector (Appeals) held that in terms of provisions of Rule 56A(9), they were not entitled to the benefit of Rule 56A, since the appellants had already filed the declaration under Rule 57G for availing modvat credit on 18-4-1986. In view of the provisions of Rule 56A(9), they were not entitled to the benefit of the proforma credit for differential duty under Rule 56A, though the differential duty was paid on 22-10-1986 in respect of the goods cleared during the period from 30-12-1985 to 24-3-1986. On this reason, he allowed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in respect of the duty paid on the same inputs. In this case, admittedly, they have not sought for simultaneous benefit in respect of inputs received after the filing of declaration under the modvat scheme. The differential duty paid was only in respect of the inputs received by them during the period when they were under proforma scheme. Moreover, there are specific provisions for demanding duty both under Rule 56A(5) and Rule 57-I. No such demands have been issued and hence mere filing of the appeal by the Department under the direction of the Collector under Sec. 35E, would not make the demand payable and the same is not enforceable. He also contended that Rule 56A(9) provided that a manufacturer availing of Rule 57A procedure cannot s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rise because of the specific bar envisaged under Rule 56A(9). He also referred to the provisions for transfer of credit from proforma account to modvat account as laid down under sub-rule (3)(vi)(a) of Rule 56A, whereunder it is clearly laid down that - the credit of duty allowed in respect of any material or component parts, and lying unutilised with a manufacturer immediately before obtaining the dated acknowledgement of the declaration made under Rule 57G, may be transferred to his account in form RG-23". Admittedly, in this case, a declaration has already been filed under Rule 57G as early as on 18-4-1986 and whatever credit in the proforma account lying in balance was also transferred to the modvat account with the permission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the duty particulars indicated on the Gate Passes; (ii) Whether the transfer of the credit from the proforma account to the modvat account in respect of the differential duty as permitted by the Assistant Collector is legally sustainable. 7. We would like to deal with both the issues from a different angle, which has not been considered by the authorities below strictly in terms of the provisions of Rule 56A. For this purpose, we consider it necessary to reproduce the relevant proviso (5) to sub-rule (2) of Rule 56A, as below: Provided also that if the duty paid on such material or component parts (of which credit has been allowed under this sub-rule) be varied subsequently due to any reason resulting in payment of refund to, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 57G. Hence, the first alternative prescribed under proviso (5) to sub-rule (2) of Rule 56A is necessarily required to be ruled out. All the same, it is not the case of the department that there was no account current being operated under Rule 173G(1) in the case of the appellants. Hence, the appellants are entitled to get the credit in the PLA maintained under Rule 173G(1). Thus, even if it is held that credit cannot be taken in proforma account in respect of the differential duty paid subsequently, such a credit is required to be given in the PLA account. The question of granting cash refund is also provided in the said proviso and it will arise only where such adjustment is not possible either in RG 23 account or in PLA. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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