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Madhya Pradesh High Court · body

2001 DIGILAW 255 (MP)

Union of India v. Primo Pick 'n' Pack Ltd.

2001-03-15

A.K.MISHRA, BHAWANI SINGH

body2001
Short Note The present Letter Patent Appeal has been preferred by the Union of India and others, aggrieved by the order dated 15.12.2000 passed by learned Single Judge in Writ Petition No. 4486/99. The learned Single Judge has allowed the writ petition and the orders dated 2.8.1993, 11.5.1994 and 9.3.1999 disallowing the inputs credit as contained in Annexures-P-15, P-18 and P-20 have been quashed and the competent authority has been directed to verify the records and pass appropriate orders in consonance with law laid down in the case of Gilt Pack Limited v. The Assistant Collector, Central Excise, Indore, [1994 (69) Excise Law Times 222 (M.P.)] decided by the Madhya Pradesh High Court. The respondent-Company submitted its representation on 8.5.1986 to the Assistant Collector to ascertain the exact nature of the produce and to give it proper classification and till the classification is made, the respondent agreed to be assessed provisionally as per the classification made by the Department. Sample was collected by the Department and the same was sent to the Chemical Examiner Central Excise Revenue. Central Laboratory, New Delhi. However, the Excise Department took no action to give a proper classification to the product manufactured by the respondent Company and insisted upon payment of duty under the head of 'Textile'. Clarification was again sought but no classification was made. Later, the duty was paid under protest on 12.6.1986. However. due to inaction of the Department, the respondent was put to disadvantageous position. It could not avail the credit of duty paid on inputs, i.e. the raw materials and continued to pay duty on 'finished products as 'textile' articles. MODV AT (Modified Value Added Tax) facility was introduced in March. 1986 by the Central Government. Under Rule 57-G, Excise Rules, 1944 (hereinafter referred to 1944 Rules), in order to avail MODVAT credit, an intimation by the manufacturer to the Assistant Collector about the articles upon which he proposes to have MODVAT credit has to be sent. Rule 57-H of the 1944 Rules is a transitional provision, Rule 57-H (i)(ii) of the 1944 Rules was deleted in the year 1989. The effect of the amendment was that credit was allowed only in respect of inputs lying in stock immediately before the filing of the declaration but received after 1.3.1987. Rule 57-H of the 1944 Rules is a transitional provision, Rule 57-H (i)(ii) of the 1944 Rules was deleted in the year 1989. The effect of the amendment was that credit was allowed only in respect of inputs lying in stock immediately before the filing of the declaration but received after 1.3.1987. The said sub-clause was again introduced in the year 1991, whereby the Assistant Collector was empowered to allow credit both in respect of inputs lying in stock as well as inputs used in the manufacturing of final product. The respondent sought permission for filing a declaration to avail MODV AT facility but owing to wrong classification, it could not avail the facility and the respondent paid the lax. Another manufacturer - HDPE Woven Sacks/Tapes/Fabrics filed a writ petition before this Court for declaration that HDPE articles are classifiable under Chapter 39 of the Act and not under Chapters 54 and 63. The Court allowed the writ petition. Thereafter, the respondent tiled classification list for classifying the product under Chapter 39 and MODY AT declaration under Rule 57-G giving the details of the goods manufactured and sought benefit of the credit of duty on inputs under Rule 57-A on 18.12.1989. The classification was approved by the Assistant Collector vide order dated 25.2.1991. Three separate claims were preferred seeking credit of the duty already paid on inputs. The claims were filed with respect to (1) inputs lying in stock as on 21.12.1989; (2) on the inputs contained on semi-finished/finished goods lying in stock on 21.12.1989; and (3) inputs (raw materials) consumed during the period 1.3.1987 to 20.12.1989. The Assistant Collector issued a notice to show cause as to why amount of credit claimed be not restricted to the inputs lying in stock and why the claim for the rest be not disallowed. The Department proposed to disallow the claim for the rest on the ground that on the date of filing of declaration, there was no provision for allowing credit of duty in respect of inputs which have been consumed. The respondent, in the reply to the show-cause notice contended that right which had accrued to it under unamended provision could not he denied to it. The Assistant Collector allowed only the claim for credit in respect of inputs lying in stock immediately before the filing of declaration amounting to Rs. 2.66.814.00 and on the ground of amended provision. The respondent, in the reply to the show-cause notice contended that right which had accrued to it under unamended provision could not he denied to it. The Assistant Collector allowed only the claim for credit in respect of inputs lying in stock immediately before the filing of declaration amounting to Rs. 2.66.814.00 and on the ground of amended provision. the rest of the claim was disallowed. Against disallowing the credit. writ petition was filed before this Court. This Court. in the Case of M/s Gilt Pack Limited v. The Assistan Collector. Central Excise. Indore (M.P. 724/91) had allowed the said writ petition and directed the Department to allow the credit facility on inputs. The respondent also in appeal before the Collector (Appeals) Indore. contended that the judgment of the High Court be applied to it. The claim was rejected by the Collector (Appeals) Indore on 11.5.1994. Writ Petition No. 2789/94 was filed. Since an appeal was pending before the CEGAT. the writ petition was withdrawn with a liberty to file fresh writ petition in case necessity arises. Ultimately the appeal was dismissed by the CEGA T on the ground of amendment made in Rule 57H in the year 1989. The order passed by the CEGAT was challenged before the Single Bench. The case of the Revenue (present appellants) was that there was no erroneous classification made. If the respondent was aggrieved by the Department's Stand. it should have challenged the classification and after lapse of time. the respondent could not agitate the issue. Learned counsel for the appellants urged that the decision of the Single Bench is bad in law and question cannot be re-opened. Learned counsel for the appellants has relied on the decision of the Apex Court in the case of Collector of Central Excise. Kanpur v. Flock (India) Private Limited. [ 2000 (120) ELT 285 (SC)]. Learned Single Judge has distinguished the aforesaid case on the ground that in the said case. the assesses had questioned the order by filing a refund claim on the ground that adjudicating authority had committed an error in passing the earlier order. In the instant case the facts are clear that right from the beginning. the respondent has been agitating the matter and it had filed requisite declaration in the year 1989 which ought to have been considered. In the instant case the facts are clear that right from the beginning. the respondent has been agitating the matter and it had filed requisite declaration in the year 1989 which ought to have been considered. The respondent was deprived of availing the facility of MODVAT credit owing to the wrong classification. For that the respondent should not be faulted. Thereafter. it had agitated the question in appeal upto the CEGAT. Thus. the facts of the case of Gilt Pack Ltd. v. The Assistant Collector. Central Excise. Indore (supra) and of the present case are the same. The view taken by the earned Single Judge calls for no interference in the present appeal. The appeal is dismissed.