M.M. Kumar, J. - (1.) THE Customs, Excise and Service Tax Appellate Tribunal, New Delhi, which was earlier known as Customs, Excise and Gold (Control) Appellate Tribunal (for brevity, 'the Tribunal'), has sent the following questions of law for adjudication of this Court accepting the application of the dealer filed under Section 35C of the Central Excise and Salt Act, 1944: (i) Whether the interpretation of Rule 57G adopted by the Hon'ble Tribunal is proper and just; (ii) Whether the Modvat credit which is otherwise available to the applicant -appellant, can be disallowed on the ground that the same was availed at later date and after a period of six months from the date of taking original credit; and (iii) Whether the Hon'ble Tribunal was justified in disallowing the Modvat credit which was undisputedly available to the appellant after a period of six months from the date of taking original credit.
(2.) THESE substantial questions of law are stated to have emerged out of the order dated 5 -12 -1997 passed by the Tribunal rejecting the appeal filed by the dealer -respondent against the order of the Commissioner (Appeals) by which the duty demand of Rs. 22,83,788.60 was confirmed and credit of duty of insulated paper was restricted to Rs. 800 per M.T. in terms of third proviso to Notification No. 177/87. The differential credit claim made by the dealer was also held inadmissible. Brief facts of the case necessary for disposal of the controversy raised in the instant petition may first be noticed. The dealer had imported insulated paper from various countries and had initially taken Modvat credit of duty of excise at the restricted rate of Rs. 800 per M.T. in accordance with the third proviso to Notification No. 177/86 as amended, for the import of insulated paper in respect of the period of 4 -1 -1989 to 1 -2 -1991. The dealer did not avail full credit of additional duty paid by them under Section 3 of the Customs Tariff Act, 1975 under the mistaken impression that the credit available was restricted to Rs. 800 per M.T. on the actual duty. It was subsequently realized that there was no restriction in respect of additional duty of customs. Consequently, they took a credit of differential duty to the tune of Rs. 22,83,788.60 by making a credit entry in their RG -23A Part I on 24 -5 -1991. The dealer was served with a show -cause notice on 14 -10 -1994 alleging that the credit of duty on insulated paper was restricted to Rs. 800 per M.T. in terms of third proviso to Notification No. 177/86 -CE, dated 1 -3 -1986 and, therefore, the differential credit of additional duty of customs amounting to Rs. 22,83,788,60 was impermissible. The dealer was asked to show cause why the said amount should not be recovered under Rule 57(1) of the Central Excise Rules. The Tribunal held that the omission of the expression "specified duty" was deliberate and there was no intention to limit the credit of Rs. 800 per M.T. where the credit originated from the payment of additional duty of customs. Therefore, while upholding the claim of the dealer to credit of the entire amount paid as countervailing/additional duty of customs shown in the Bill of Entry, it was held that as regards the question of allowing differential duty of credit after taking of original credit of duty, has to be examined in the facts and circumstances of each case. Expressing its opinion in respect of instant case, the Tribunal observed that the Bills of Entry showed the credit amounts of CVD paid by the dealer but the dealer had not produced any evidence to prove that there was a situation which necessitated taking of credit of differential amounts of duty subsequent to the date of taking of credit at the rate of Rs. 800 per M.T. It was further held that in the absence of any evidence a reasonable period has to be inferred and read. Keeping in view the facts and circumstances of the instant case, a finding was recorded that no new situation had arisen necessitating taking of differential credit between the date of taking credit and the date of taking additional credit of differential duty. It went on to held that the reasonable period must be construed to be six months. The dealer feeling aggrieved then sought reference to this Court of the aforementioned questions of law.
(3.) WE have heard Mr. Kamal Sehgal, learned Counsel for the revenue. The principal question raised before us is whether a period of limitation of 6 months for availing Modvat credit during the relevant period could be introduced when no provision existed. It is relevant to mention that in the present case we are concerned with the period from 4 -1 -1989 to 1 -2 -1991. It is significant to notice that Rule 57G of the erstwhile Central Excise Rules, 1945 prescribing limit of six months was introduced on 29 -6 -1995 which had prospective effect. Therefore, it has to be concluded that no period of limitation was prescribed by any statutory provision. The question is no longer res integra. The Supreme Court in the case of CCE v. Raghuvar (India) Ltd. : [2000] 5 SCC 299 has held that the period of limitation cannot be imported by the Courts by implication in the absence of a specific provision made in that regard. The view of the Supreme Court is discernible from reading of few lines from para 13 of the judgment, which are as under: 13. Any law or stipulation prescribing a period of limitation to do or not to do a thing after the expiry of period so stipulated has the consequence of creation and destruction of rights and, therefore, must be specifically enacted and prescribed therefor. It is not for the Courts to import any specific period of limitation or implication, where there is really none, though Courts may always hold when any such exercise of power had the effect of disturbing rights of a citizen that it should be exercised within a reasonable period....;