Judgment:
1. The appellants were using malted barley and malt extract in the manufacture of bournvita availing of proforma credit of the duty paid on the inputs in terms of Rule 56A of the Central Excise Rules, 1944.
On 29-7-1986, these two inputs were exempted from payment of duty. On this date, there was a credit balance in the assessees' account to the extent of Rs. 3,32,342/-. On 1-3-1987, the final product viz. bournvita was covered under Modvat credit scheme. The assessees, thereafter, requested the jurisdictional officer to transfer the credit balance lying in their proforma credit account to their Modvat credit account.
The Asstt. Commissioner denied this request. In doing so, he held that the proforma credit was not in operation from 29-7-1986 to the date of application. He observed that Rule 57H of the Rules permitted such transfer to be made where proforma credit account was "operative immediately prior to 28-2-1987." He, therefore, held that the request for transfer of credit balance was not acceptable. The Commissioner (Appeals) in his order held that for transfer of proforma credit, the assessees should be availing of the procedure under Rule 57A immediately before opting for the Modvat credit procedure. He observed that from 29-7-1986 to 27-3-1987, when the application under Rule 57H Was made, the assessee was not operating under procedure of Rule 56A.On this observation, he disallowed the benefit of Rule 57H(3). Hence, the present appeal.
2. Shri Rohan Shah has placed reliance on the Tribunal judgment in the case of National Industrial Corporation v. C.C.E. - 1993 (68) E.L.T.692 (Tribunal). In this judgment, the Tribunal was discussing the scope of the word '"immediate", used in Rule 57H. The Tribunal held that the word was not to be read in isolation but in conjunction with other provisions of the said Rule. In another judgment cited by him in the case of Soft Beverages Pvt. Ltd. v. C.C.E. -1989 (44) E.L.T. 66 (Tribunal) also, the Tribunal had held mat the notification issued under Rule 57H did not define the words "immediately before". The caution was administered by the Tribunal mat the meaning of the words has to be such as would advance the legislative intent for which as particular legislation had been introduced.
3. With this caution in mind, we have seen the contrary provision existing in Rule 56A(3) which reads as follows :- "The credit of duty allowed in respect of any material or component parts. and lying unutilised with a manufacturer immediately before obtaining the dated acknowledgement of the declaration made under Rule 57G, may be transferred to his account in form RG 23A".
4. There is no prohibition for transfer of credit lying unutilised irrespective of the duration for which it is lying unutilised.
5. We thus find that the interpretation made by the ld. Collector that where the credit balance under Rule 56A was lying unutilised for a substantial length of time such transfer was prohibited by the use of the word "immediately" in Rule 57H was not correct. Reading Rule 56A and Rule 57H in harmony with the caution given by the Tribunal as to the manner in which the words "immediately before" should be interpreted, we find that the facility of transfer was available to the assessee. We, therefore, allow the appeal with consequential relief.