1. The short point for determination in this appeal is whether the Assistant Collector competent to disallow the Modvat credit taken in terms of Rule 57-I and to demand/recover the amount utilised.
2. The facts of the case are that the respondents had wrongly availed the Modvat credit amounting to Rs. 62,902/- in one case and Rs. 1,38,033/- in another case. The respondents contended that they were purchasing materials from disposal yards of M/s. Bhilai Steel Plants, Bhilai; that these materials, they were getting under the cover of delivery challans; that the rate of duty at which rate duty was initially paid and the amount of duty involved in the goods covered under the said delivery challans are not mentioned therein; that the disposal store is nothing but stockyard for iron and steel scrap; that they had taken Modvat credit on the items under Chapter 72/73 at minimum rate in conformity with CBEC under F. No. 267/68/88-CX. 8, dated 1-6-1969 (sic); that they claimed that the Modvat credit was rightly taken by the respondents. The Assistant Collector after considering the submissions made, confirmed the demand. In appeal, the Collector (Appeals) had held that the Board had instructed that the respective adjudicational officers should issue and decide the show cause notice and that since the power of adjudication here is not with the Assistant Collector, he cannot issue show cause notice, leave alone the Superintendent. He, therefore, allowed the appeal of the assessees.
The Collector (Appeals) also held that the Assistant Collector thus has powers to adjudicate the cases up to Rs. 50,000/- only and that since the amount in the instant case is more than Rs. 50,000/-, therefore, the Assistant Collector was not competent to adjudicate the case.
Against this finding, the Revenue has come up in appeal before us stating that Rule 57-I provides "where credit of duty paid on the inputs has been taken on account of an error, omission or mis-construction on the part of an officer or a manufacturer, or an assessee, the proper officer may, within six months from the date of such credit serve notice on the manufacturer or the assessee who has taken such credit requiring him to show cause why he should not be disallowed to such credit and where the credit has already been utilised, why the amount equivalent to such credit should not be recovered from him"; that in Sub-rule (xi) of Rule 2 of Central Excise Rules, 1944 "Proper Officer" means the officer in whose jurisdiction the land or the premises of the producer of any excisable goods are situated; that this definition is wide enough to include all Central Excise Officers having jurisdiction over a factory; that the Board's circular relied upon by the Collector (Appeals) prescribed that monetary limits only for adjudication of cases.
3. None appeared for the respondents. However, the issue is of interpretation of law, it was decided to proceed further in the matter.
4. Shri Jangir Singh, learned JDR appearing for the Revenue reiterated the grounds set out above.
5. Heard the submissions of learned JDR. Perused the evidence on records as well as the requirement of Rule 57-I. In the instant case, we note that the dispute is limited to Modvat credit. There is a Rule under which the Modvat credit is disallowed and the amount utilised is recovered, viz. Rule 57-I. Rule 57-I stipulates that the proper officer may demand the amount utilised after disallowing the Modvat credit taken. The Tribunal has been consistently holding that the proper officer for the purpose of Rule 57-I is the Assistant Collector. The Assistant Collector being the proper officer for the purpose of Rule 57-I, therefore he is fully competent to disallow the Modvat credit wrongly taken and recover the amount utilised. Since this rule is specific one, therefore, the Board's circular relied upon by the Collector (Appeals) will not be applicable where Rule 57-I alone is invoked and is made applicable. In the instant case, there is no stipulation for imposition of penalty, therefore, it does not fall beyond Rule 57-I. The Collector (Appeals) relied upon the instructions issued in terms of Section 11 A. In the instant case, Section 11A as such has not been invoked as Rule 57-I is very specific about Modvat credit. Having regard to the fact that for the purpose of Rule 57-I, the Assistant Collector is the proper officer, we hold that the Assistant Collector has competent to decide the issue. In this view of the matter, the impugned order is set aside and the appeal is allowed by remand. The case is remanded to Collector (Appeals) with the direction that he will consider the case on merits and pass appropriate orders in accordance with law.