9911796707
TMI Blog1993 (10) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent on re-classification of the goods and refund of Rs. 4,41,699.11 was allowed by the Assistant Collector with a rider subject to the variation/adjustment in the Modvat credit availed by the buyers for the items involved in the refund as per Rule 57E . On appeal filed by the respondents, the learned Collector (Appeals) held that no variation/adjustment in regard to the MODVAT credit taken by the buyers of the respondents goods could be done in the refund amount sanctioned and that certain adjustment will have to be effected from the persons who received the goods and who took the credit of duty paid on these goods. 4. The learned appellant-Collector in the grounds of appeal has urged that Rule 57E should be read into Section 11B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of the re-classification of the goods and that the respondents have also collected duty from the buyers based on the earlier classification. The question that falls for consideration is whether when refund is sanctioned and when the respondents are legally entitled to the same in terms of Section 11B, can any adjustment be made for the higher MODVAT credit which may have been taken by the buyers of the goods. The learned appellant-Collector has invoked the provisions of Rule 57E in this regard. Rule 57E for convenience of reference is reproduced below :- Rule 57E. Adjustments in duty credit. If duty paid on any inputs in respect of which credit has been allowed under Rule 57A, is varied subsequently due to any reason resultin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken. We have taken a similar view in the case cited by the learned Advocate for the respondents where we have held as under:- The fact that the appellant paid the amount in excess is admitted. In such a situation the appellant is entitled to the grant of refund and indeed the refund has also been made in terms of Section 11 B of the Act. Merely because the purchasers of the goods manufactured by the appellant had taken Modvat credit in regard to excess amount which the appellant had paid, it would not clothe the Department with any cause of action to seek to recover the same in terms of Section 11A of the Act. It is certainly open to the Department to initiate proceedings in terms of Rule 57E calling upon the respective buyers/consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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