Decided on October 31,1991



K. Sankararaman, Member (T) - (1.) THIS is an appeal by the Collector of Central Excise, Calcutta-II Collectorate directed against the Order-in-Appeal dated 31-12-1988 passed by the Collector of Central Excise (Appeals), Calcutta whereby he had partially allowed the appeal filed before him by the present respondents M/s. Texmaco Ltd. The appeal by the Collector is in respect of three amounts of Rs. 35,627.11, Rs. 5,06,212.66 and Rs. 24,049.80 which had been held by the Collector (Appeals) as admissible for MODVAT benefit.
(2.) It has been contended in the appeal that the credit of first mentioned amount had been allowed by the Collector (Appeals) on the ground that the respondents had been availing of the benefit of Notification No. 201/79 earlier and hence their case was covered vide Rule 57H(2) of the Central Excise Rules. This decision has been afforded on the ground that the said Notification provides for set off and that is not in the form of credit. Hence the credit is barred under Rule 51H(2). The decision for allowing credit of other two amounts of Rs. 5,06,212.66 and Rs. 24,049.80 had been challenged on the ground that the Collector while holding that the onus is on the department to prove the non-duty paid nature of goods for disallowing the facility of deemed credit had missed the point that the goods in question had been supplied to them by M/s. I.O.C. Ltd during the period February 1984 to 1st March, 1985 and hence even if the inputs were duty paid, duty had been paid prior to 31st Jan., 1986." Hence Rule 57H(2) is attracted and no question of credit whether actual or deemed credit arises at all. It is also stated in the appeal that regarding inclusion of value of inputs in the assessable value of finished goods, it has not been established by documentary evidence or otherwise and nothing has been stated by Collector (Appeals-) in his findings how he came to the conclusion that the value of the said raw material (inputs) in question had actually been included in assessable value of the instant finished goods, without which the respondent is not legally entitled to avail of the instant credits. It has, therefore, been urged that the impugned Order-in-Appeal be modified by disallowing the above mentioned credit amounts or any other Order as deemed fit be passed.
(3.) SHRI M.N. Biswas, learned S.D.R. argued the case on behalf of the Appellant Collector. He supported the appeal. He stressed the point that as regards the major amount of Rs. 5,06,212.66 and Rs. 24,049.80, duty thereon had been paid prior to 31-1-1986 as these had been received as free supply items from February, 1984 to 1st March, 1985. He pleaded that the appeal be allowed SHRI S.K. Bagaria learned Counsel for the respondents strongly opposed the appeal. He referred to the submissions contained in the miscellaneous application filed by them for permission to raise the questions of jurisdiction and limitation in regard to the notice dated 16.2.1988 issued by the Superintendent of Central Excise seeking to disallow credit taken by them in the year 1986 was without proper jurisdiction as only the Collector could issue notice if it related to clearances more than six months on the ground of suppression etc. There being no allegation of such suppression etc., the demand was time barred. These issues are pure questions of law going into the root of the matter and the relevant facts in this regard are already on record and no fresh fact or document is required to be gone into. It is a well settled that such pure questions of law can be raised at the subsequent stage of appeal also irrespective of whether they had been raised in the earlier proceedings.;

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