SOFT BEVERAGES PVT LTD Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THIS is an appeal against the order of the Collector of Central Excise (Appeals), Madras. Brief facts of the case are that the appellants had claimed the benefit of MODVAT credit on Carbon dioxide gas and crown corks after the MOD VAT credit in respect of these items became available. The appellants had been having in stock these items on the day the appellant's end-product was made eligible for the benefits and some of these had been received by the appellants in the month of January while others in the month of February, 1987. The lower authority allowed the MOD VAT concession in respect of the inputs received by the appellants in February, 1987 and denied the benefit in respect of the inputs received in January, 1987. The lower authorities have denied this benefit on the interpretation of the wording of the Rule 57H(1). The said rule for convenience of reference is reproduced below :-

(2.) The learned Counsel for the appellants, Shri Arvind P. Datar, pleaded that With effect from 1-3-1987 soft drinks were included in the MODVAT scheme and that Under Rule 57H the benefit for inputs lying in stock before that date and before a dated acknowledgement was received could be taken into reckoning for the purpose of taking the MODVAT credit. He pleaded that the lower authorities' rationale for allowing the MOD VAT credit in respect of inputs received in February, 1987 and denying the same in respect of those received in January, 1987 was not reasonable and correct in law.

(3.) WE observe that under Rule 57H MODVAT credit could be taken in respect of inputs received by a manufacturer immediately before obtaining the dated acknowledgement of the declaration made under the said rule subject to the satisfaction of the Assistant Collector that such inputs were lying in stock. WE observe that the learned Collector (Appeals) in his order has himself taken note of the fact that the words "immediately before" have not been defined in the Notification under which the Rule 57H was modified and has adopted the dictionary meaning of the word "immediately" and has held that inasmuch as the assessments on RT12 returns are finalised on a monthly basis under Rule 1731 of the Central Excise Rules, unit of assessment taken as one month should considered as the immediate accounting period for the purpose of MODVAT scheme and, therefore, the credit could be given only for the month of February, 1987 and not January, 1987. WE observe that credit taken in respect of the inputs as such has no nexus in law with the procedure for accountal of the duties paid and, therefore, it cannot form the basis for interpreting Rule 57H. The scope of the term "immediately before" as used in the Rule set out above has to be understood in the context of the rule as a whole. WE observe that while under Rule 57H (1) in the main para the words "immediately before" have been used, in 57H(1) the condition is that such inputs should be lying in stock. Taking the two together the interpretation would be that the inputs received before the receipt of the dated acknowledgement should be such as are available for verification before the credit of duty can be allowed. So long as this aspect can be taken care of there should be no difficulty in allowing the credit. The words "immediately before" have been interpreted in the context of WEst Bengal Acquisition Act, 1954, Section 6(1)(e) in the case of Nandy Chowdhury v. H.C. Dutta, (1967) 71 CWN 681 as set out in K.J. Aiyer's Judicial Dictionary, Eighth Edition, at page 470 as under :-