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TMI Blog1994 (7) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The facts which are required to be considered for disposal of the appeal can be stated as below. The Respondents are manufacturers of transformers. One of the inputs, which they brought under Rule 56A of the Central Excise Rules, was Glass Bonded Copper Strips, which were classified under T.I. 68, in respect of which Proforma Credit is available. However, the suppliers of the inputs were paying duty under protest, because they were disputing the classification and the matter went upto the High Court. The High Court of Bombay in its judgment of October, 1981 held that the aforesaid inputs are classifiable under T.I. 26A, on account of which the supplier of inputs M/s Shakti Insulated Wires Pvt Ltd were granted refund of Rs. 92,45,403/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pleads that the Show Cause Notice seeks for adjustment of the Credit initially given, consequent upon the grant of refund of the duty paid on the inputs and this action is sought to be done in terms of proviso 3 to sub-rule (2) of Rule 56A. He also refers to the said proviso to point out that this action is permitted under the Rule itself and this cannot be cons- trued to be a case of short levy or non levy or erroneous refund, which could fall within the purview of Sec. 11A. Hence the Collector (Appeals) has wrongly gone by the provisions of Sec. 11A and has held that the demand is time-barred. 4. Shri S.B. Metha, the Ld Advocate for the Respondents has referred to the Show Cause Notice dated 24-2-1983 and has pointed out that the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them in such a case, when they cannot recover the duty from the customers. He also pleads that the judgment of the Bombay High Court has been challenged by the Department and is pending before the Supreme Court and in case the Supreme Court decides to reverse the order of the High Court, then again, the amount will become due to them as credit. This aspect also has to be kept in view. 5. After hearing both the sides, we find that the facts are not disputed. The main point is whether the Show Cause Notice issued would attract the provisions of Section 11A and would have to be within the period of six months. The admitted position is that the inputs, when they were received by the Respondents, were classifiable under T.I. 68, for which P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking such additional credit, time limit of six months prescribed under Section 11B cannot be applied. Hence we are of the view that proviso (3) to sub-rule (2) of Rule 56A is a self-contained mechanism, as in the case of Rule 57E applicable to MODVAT, which can come into operation, only when there is a variation in the duty payment in respect of the inputs, for which credit was initially taken and the adjustment is called for. Hence the demand for reversal of credit or giving more credit would arise, only when the initial payment of duty was subsequently affected either by way of demand or refund. No time limit has been provided either for taking of additional credit or for recovery of credit, consequent on grant of refund. In the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X
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