2004 (2) TMI 248

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..... te Suspension were approved for payment of NIL rate of duty w.e.f. 1-2-92 they mistakenly continued to avail of total exemption under Notification No. 217/86 during 1-2-92 to 14-12-92 for their intermediate bulk drugs Chloramphenicol IP and Chloramphenicol Palmitate IP captively consumed though the intermediate drugs were not eligible for exemption. This mistake occurred on the part of the assessee as also of the Department since the Department by approval of NIL rate of duty for the intermediate drugs claimed in their classification list had endorsed the assessee's claim. On being pointed out this mistake, the assessee willingly paid the duty on the intermediate drugs on 24-8-94 though the entire demand was time barred. The Department shou .....

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..... of recoveries under Rule 12 of the Medicinal and Toilet Preparation Rules, 1956. The court observed "In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend on the facts of each case". The Commissioner held that a period of 18 months is not a reasonable period. The credit of duty paid on the inputs 18 months ago cannot be taken in the appellants case. (b) The credit belatedly taken without maintaining RG 23A at the relevant time (when the inputs were received in the factory) is not permissible. The Commissioner observed that maintenance of RG 23A Parts I II serves an useful purpose in so far as Department is concerned .....

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..... She ordered reversal of the credit taken, on the two grounds mentioned supra. We find that at a time when no time limit is prescribed for taking credit what has to be seen is whether the assessee has taken such credit within a reasonable time. The appellant, as records disclose, has taken Modvat credit after waiting for a reply on their proposal for 1½ years. If there is any delay in taking credit it has to be attributed to the department only. The other ground that the appellants did not maintain RG 23A when the inputs were received and it was only later on they could co-relate the duty paying documents with the credit taken, we observe that it is not a valid ground for rejection of the credit taken by the appellants. 8. The machinery o .....

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