- (1.) In this appeal filed under Section 35L (b) of the Central Excises and Salt Act by the Revenue, the order of CEGAT dated 21-2-1994 in its final order No. 73/94-C is under challenge. By that order, the Tribunal rejected the Department's appeal following inter alia its earlier order in Vikrant Tyres Ltd. v. CCE, Bangalore, 1988 (38) ELT 301, the appeal against which filed by the Revenue was dismissed by us on 13-9-2001 on the ground that became infructuous in the light of subsequent event.
(2.) Let us now take stock of the material facts giving rise to this appeal. The respondent herein is manufacturer of tyres, tubes and flaps. The respondent was availing the pro forma credit of duty on inputs viz. Synthetic rubber, carbon black and rubber processing chemicals. The pro forma credit on those inputs to the tune of Rs. 62,53,023/- for the period 1-3-1984 to 14-3-1986 and Rs. 5,64,236/- for the period November, 1984 to February, 1986 utilised in respect of tyres, tubes and flaps cleared at nil rate of duty was reversed/debited under protest, presumably at the instance of Excise Authorities. Later, the respondent claimed refund thereof. The case of the respondent was that the Notification No. 95/79 (as amended from time to time) nowhere prescribed that the pro forma credit of duty paid on the inputs was available only in relation to duty-paid outputs. The respondent contended that the relevant notification did not envisage any link between inputs and outputs. By a reasoned order dated 11-12-1989, the Assistant Collector of Central Excise, Meerut rejected the assessee's claim for refund. He held that the assessee was not entitled to avail of the benefit of pro forma credit on the inputs used in the manufacture of final products i.e. tyres, tubes and flaps which were cleared at nil rate of duty. The Assistant Collector concluded that the pro forma credit was correctly debited/reversed by the assessee and, therefore, the question of refund did not arise. In this context, the following crucial finding in the order of the Assistant Collector deserves to be noted for the proper appreciation of the core issue involved :- "In the present case, on examination of record, it is noticed that during the relevant period (for which refund has been preferred), the final product, namely, tyres, tubes and flaps were cleared by the party at nil rate of duty as the same were cleared as original equipment or ADV."
(3.) The appeal filed by the assessee against the said order was allowed by the Collector (Appeals) based on the Tribunal's decision in Vikrant case (supra). Aggrieved there by,the department filed an appeal before CEGAT. The CEGAT by the impugned order, rejected the appeal, after quoting in extenso its earlier order in Vikrant Tyre case.In that case, the Tribunal while construing the Notification No. 95/79 held that the notification did not have any condition that there should be nexus between the inputs and outputs. According to the Tribunal, "the only question that can arise while examining the question of eligibility to this notification is whether the inputs described in column (3) have been used in the outputs described in column (5)." The Tribunal further observed : "the learned JDR's argument that goods mentioned in column (5) (final products) are only those which pay duty is not supported by the wording of the notification. No condition regarding payment of duty is contained anywhere in the notification." The correctness of this view taken by the CEGAT is being assailed in this appeal.;