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TMI Blog1992 (4) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) No. AMP-753/BII-301/88 dated 21-11-1988. In both cases, the issue involved is whether Modvat Credit in respect of the duty subsequently paid during the period prior to 15-4-1987 - the date on which Rule 57E was amended providing for adjustment in duty credit consequent on subsequent payment of non-levied duty or short-levied duty for any reason in respect of inputs earlier received can be allowed, when such a claim for additional credit is also made prior to 15-4-1987. The appellants in both these cases pleaded that the additional credit is to be given in terms of Rule 57A and no recourse need be had to Rule 57E, whether it was prior to amendment or subsequent to amendment. Hence, since the issues canvassed (though in a different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by I.P.C.L. was sought to be recovered from the appellant, being the purchaser of inputs. The Jurisdictional Supdt. issued certificates of payment of differential duty by I.P.C.L. quoting original gate pass numbers of I.P.C.L., which certificate in turn was received by the appellant. On the basis of these certificates the appellant approached the Asst. Collector for taking the credit of duty paid on inputs, which stood finally classified under Chapter 38 which chapter is covered by notification issued under Rule 57A. It is necessary to mention here that differential duty was paid on 14-8-1986 by I.P.C.L. and certificates of payment are dated 18-8-1986. Additional Credit was sought to be taken by them through an application dated 11-12-1986. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance on provisional assessment basis under Chapter 27. Since Chapter 27 was not notified under Modvat scheme, there was no occassion to claim Modvat credit and take the credit in RG 23A initially. But when the said inputs are finally assessed under Chapter 38 and differential duty also paid under Chapter 38, cause of action for claiming Modvat credit has arisen on the date of payment of differential duty. Hence they can take credit under Rule 57A, without even seeking for permission from the Department. Only by way of abundant caution, they have approached the Department for giving the credit. Hence, he contended that in their case, there was no initial credit taken, which calls for variation in terms of Rule 57E. When no credit could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not provide for this contingency prior to 1-3-1987 and 15-4-1987, the appellants cannot claim the benefit under Rule 57A. Moreover, Rule 57A envisages taking of credit of duty of even in respect of inputs notified under the scheme for utilising the said credit towards the payment of duty on the final product. This is required to be read with other Rules of the Modvat scheme. Rule 57A envisages not only filing a declaration but also bringing in such inputs under G.P. 1, AR 1 or any other recognised duty payment documents. Moreover, such inputs received and credit involved are required to be entered in RG 23A Part I II respectively. These requirements cannot be given a go-by without a clear provision in the Rules providing for extension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion and not a clarification. Hence we held that taking of Modvat credit of differential duty at a subsequent stage during the period, when it was not provided for in Rule 57E was not permissible. 6. Now, we find that the East Regional Bench in two cases of SAIL Ltd. (Supra) and Southern Regional Bench in yet another case Larsen Toubro have taken a contra view holding that in such circumstances credit is permissible under Rule 57A itself and the amended provisions of Rule 57E are in the nature of clarification. Hence, in all fairness, we deem it necessary to refer this issue to the President for constituting a Larger Bench, so that the position of law can be decided by the Larger Bench so constituted. 7. While doing so, it is also our e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provision of Rule 57A to be read with the provision of other Rules namely 57B, 57C, 57D, 57E, 57F, 57G etc. Rule 57A cannot be read in isolation. In that view, it is inescapable to hold the view that the only provision enabling variation in credit is Rule 57E and when that Rule did not provide for the adjustment in credit due to short levy/non-levy, that was a policy decision and we, being the creature of statute, cannot go beyond that. 9. In fairness, we are also to observe that though Rule 57E did not provide for such adjustment in credit of differential duty recovered due to short levy or non-levy, it did not specifically bar extension of such credit. It can also be argued that what is not prohibited in the Rule, can be permitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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