KOTTUKULAM ENGG P LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) E/COD/137/88 For the reasons stated in the condonation application, as the delay in filing the cross-objection was not wilful, the same is condoned.

(2.) This appeal is directed against the order dated 18,3.1987 passed by the Collector of Central Excise (Appeals), Madras. The appellants herein are manufacturers of Pre-Stressed Concrete Sleepers which were classified under Tariff Item No. 68 of the erstwhile Central Excise Tariff prior to 28.2.1986 and under heading 6807.00 of the Central Excise Tariff Act, 1985. One of the raw materials required for this purpose is High Tensile Steel Wire (HTS Wire) which was classified under Item No. 68 of CET. The appellants were availing of set off of duty in terms of Notification No. 201/79 on the HTS wire as an input for their finished product. This Notification was rescinded after coming into force of the new Tariff Act. Thereafter the appellants represented to the jurisdictional Central Excise Officer for being allowed to avail of the proforma credit under Rule 56A of the Central Excise Rules. Show cause notice was issued on 23.8.1986 saying that Notification 201/79 was rescinded w.e.f. 1.3.1986 and that the appellants are not eligible for proforma credit from 1.3.1986 onwards and that though the appellants were eligible to take credit from 24.4.1986 onwards in terms of Notification No. 280/86 on that date, since they had not declared to the Assistant Collector on that date, they would be eligible only from 1.6.1986, the date on which they filed the declaration before the Assistant Collector. Therefore, the Department held that the credit taken by the appellants for the period 1.3.1986 to 31.5.1986 should be reversed. The amount involved is Rs. 2,58,506.78. The Assistant Collector, on consideration of the reply to the show cause notice confirmed this. Appeal was filed before the Collector (Appeals) against Assistant Collector's order and the appellate authority held that as the appellants were not availing of proforma credit under Rule 56A prior to 28.2.1986 they were not eligible for such benefit after 1.3.1986. He, however, held that by Notification No. 280/86 dated 24.4.1986 they became eligible for such credit from that date and accordingly directed the Assistant Collector to calculate afresh the amount of their eligibility as per law. The case of the appellants presently before the Tribunal against the order of the Collector (Appeals) is that both the Assistant Collector and the Collector (Appeals) have not considered the scope of Notifications 91/86 and 280/86 which according to the appellants are applicable to them.

(3.) SHRI K.M. Vadivelu, the learned D.R. appearing for the Department contended that the benefit of Sub-rule (8) of Notification No. 91/86 is specific only to those manufacturers who are actually availing of proforma credit facility under Rule 56A; The appellants were not availing of this and were working under set off Notification 201/79, and the continued facility of credit to those working under such Notification is made available only by Notification No. 280/86 dated 24.4.1986. The appellants having filed the necessary declaration required under the law only on 1.6.1986, they have rightly been denied credit with effect from 1.3.1986. He also assailed the finding of the Collector (Appeals) that the appellants will be eligible for the credit right from 24.4.1986 onwards, the date of issue of the Notification. The learned D.R. further submitted that they had not complied with the necessary condition for being allowed the facility by filing the necessary declaration before the Assistant Collector in time. Therefore, this part of the order of the Collector (Appeals) is bad in law according to the learned Consultant.