- (1.) In terms of the judgment and order of the Division Bench RAHEE INDUSTRIES LTD v. CCE, 2002 148 ELT 927 the department referred the matter to this Court on the following questions of law for opinion (a) After availing the credit under the Modvat Scheme, the assessee/respondent reversed of the same for the purpose of enjoying the benefits under value Based Advance Licence and Duty Exemption Entitlement Schemes and ultimately could not avail the aforesaid two schemes by reason by cancellation of advance licence, whether the assessee/respondent again can avail of benefits of the Modvat Scheme under Rule 57G of the Central Excise Rules, 1944 after expiration of six months. (b) Whether the benefit of credit under the Modvat Scheme in terms of Rule 570 of the Central Excise Rules, 1944 can be extended in case of an assessee after expiration of six months from the date of issuance of documents in a case when the assessee initially availed the said benefits within a period of six months and subsequently reversed the same for the purpose of availing the benefits under the value Based Advance Licence and Duty Exemption Entitlement Scheme which he could not ultimately avail. (c) Whether recredit and/or second credit is new credit entry or continuation of the first credit entry on the factual background of the case.
(2.) Before we express our opinion on the aforesaid formulated questions of law we state the short facts as hereunder :- On or about 3rd January, 1997 the Superintendent of Central Excise, Range-VII, Howrah South Division, Calcutta-II issued a show cause notice to the respondent dealer alleging that there has been irregular/wrong availment of Modvat credit of duty paid on inputs used in relation to the said declared goods amounting to Rs. 6,45,293.00 should not be disallowed in contravention of the Rules 57A of the provisions of proviso 2 of sub-rule (2) of Rule 57G of the relevant notifications and should not be recovered and/or demanded under Rule 57-1 of Rules 1944 read with Section 11A of the Central Excise Act, 1944 and also as to why the amount of penalty should not be imposed upon the dealer/respondent under Rule 173Q (bb) of the said CE Rules, 1944 and interest @ 28% should not be recovered and/or charged on them from the date of taking wrong credit under Section 11AA of the said Act, 1944. The said show cause notice was replied to by the respondent and the Assistant Commissioner thereafter heard the respondent and going through the records did not accept that explanation given in the reply by the respondent. Hence the said Commissioner by order dated 18th February, 1999 disallowed the Modvat credit of duty amounting to Rs. 6,45,293/- in terms of Rule 57-1 of the said Rule. A sum of Rs. 50,000/- was also asked to be paid on account of penalty under Rule 173Q of the said Rule in contravention of the aforesaid Rule. The assessee/respondent was also held liable to pay interest on the aforesaid amount at the appropriate rate as warranted under Section 11A of the Central Excise Act, 1944.
(3.) On appeal being taken to the learned Tribunal by the assessee/respondent the matter was heard by the learned Tribunal. The learned Tribunal by the impugned judgment and order has allowed the appeal and set aside the impugned order and granted consequential relief to the respondent.;