Judgment:
1. Respondent is a manufacturer of excisable products falling under Chapter 42 of the Central Excise Tariff. Modvat credit had been availed by the respondents in respect of inputs used by them in the manufacture of their final product. During the relevant period they had taken Modvat credit equal to the duty paid on some of the inputs received by them from small scale manufacturers. The credit taken was equal to the duty shown in the gate passes. Subsequently they took the differential credit in terms of Rule 57B. This was objected to by the department and after show cause notice the Assistant Collector dropped the demand. The department filed an application to the Collector (Appeals) for setting aside this order. The application was rejected by the Collector (Appeals) and hence the present appeal before the Tribunal.
2. Heard Shri V.R. Sethi, learned DR and Shri R.L. Bhaskar, Company Secretary who represented the respondents.
3. I have taken note of the submissions made by both the sides. I have perused the record. I find that the Collector (Appeals) while passing the impugned order has placed reliance on the Tribunal decision in the case of Mysore Lac and Paint Works Ltd. reported in 1991 (52) E.L.T.590. In the said decision the concerned assessee had initially taken Modvat credit limited to the duty actually paid by the manufacturer of the input material who had availed of the benefit of small scale exemption available under Notification No. 175/86. Since Rule 57B provided for the availment of higher notional credit equal to the duty leviable but for the said small scale unit exemption, the differential duty admissible to the manufacturers of excisable products using such inputs was taken subsequently. The objection taken by the department that there was no provision for such piecemeal availment of credit was negatived by the Tribunal. I find that this decision has been consistently followed by the Tribunal in several subsequent cases. In one such case of Premier Cables Ltd. -1991 (56) E.L.T. 853, the Tribunal while observing that while there was nothing in the provisions to bar an assessee from taking the differential duty in terms of Rule 57B subsequent to the date of original taking of credit for the lesser amount, rejected the contention raised by the department that by resorting to such piecemeal availment of credit on more than one occasion, the assessee is causing administrative inconvenience to the department. This argument did not find favour with the Tribunal which observed that by taking less credit than what he was entitled to, it is the assessee who is depriving himself of the benefit till the time he actually takes the credit. As long as the differential credit amount was taken within a reasonable time which time was considered to be in line with the period of six months provided for in Section 11B relating to refunds, such action by the assessee was held to be in order. It is seen in the present case, the show cause notice itself has been issued within a period of six months from the date of taking of original credit as seen from the brief facts of the case mentioned in the Order-in-Original. There is no dispute about the receipt of the inputs and the admissibility for Modvat credit as the original instalment of credit taken has not been objected to. The same duty paying document relating to such original credit amount holds good for the differential credit which is a legal benefit flowing from Rule 57B. The credit has been correctly allowed under the impugned order and I see no reason to interfere with the same. The appeal by the department is dismissed.