Full Judgment
The Collector (Appeals) in his order had held :- "I observe that under Rule 57G(2) proviso the Central Government has been empowered to direct that with effect from a specified date, all stocks of the specified inputs in the country excepting such stocks lying in a factory, customs area or a warehouse as are clearly recognisable as being non-duty paid may be deemed to be duty paid and the credit of duty in respect of the said inputs may be allowed at such rate and subject to such conditions as the Central Government may direct, without production of the documents evidencing the payment of duty. It is clear from this provision that the Central Government has been empowered to specify the date from which this facility will be applicable. Once this date is specified, it has to be effected from that date only irrespective of when this is communicated to the trade or general public. This is not like a notification where no date is specified. If however, a particular notification specified the date from which it will be effective, the notification has to be made effective from that date. Generally no such date is specified in the notification and therefore a question had arisen as to the date from when a notification will be effective. Therefore, the same analogy cannot be adopted with reference to the directions issued by the Central Government under Rule 57G(2). Thereafter, whenever the same facility is withdrawn w.e.f. a particular date specified by the Central Government the same analogy will hold true and the direction has to be given effect to from the said specified date irrespective of the date when it is circulated. Otherwise the sanctity of the specified date will no longer survive and the subordinate authority will, by implication be empowered to fix a date from when the direction will be effective which cannot be the legal position as existing under Rule 57G(2).
In view of the above, the decision of the Asstt. Collector in these two cases is upheld. However, as regards the imposition of penalty by the Asstt. Collector in the order portion is that the appellants had not deposited the demanded amount. But this is not a justifiable ground for inflicting penalty on the appellants. Therefore, the action to impose penalty on the appellant on this ground cannot be sustained. Accordingly, the order-in-original No. 104/89 dated 5-7-1989 is modified to that extent only. Excepting for this modification in this order, the two impugned orders are otherwise confirmed and the appeals are disposed of accordingly." 2. Briefly stated the facts of the case are that the appellant is engaged in General Fabrication Work. For fabrication of these items the appellant used the M.S. Sheets and claimed deemed Modvat credit under the Government of India directives which was circulated under the Delhi Collectorate Trade Notice No. 33-C.E.(2)-II-25/86, dated 16-4-1986. The said deemed Modvat credit was claimed by the appellant on M.S. Sheets purchased from the open market during the period 4-11-1987 to 5-1-1988.
However, the Ministry of Finance under their order F. No.332/30/87-TRU, dated 2-11-1987, withdrew the facility of deemed Modvat credit on M.S. Sheets w.e.f. 2-11-1987. The said deemed Modvat credit availed by the appellant on or after 2-11-1987 was disallowed while approving the RT-12 returns for the month of November, December and January. As the appellant did neither reverse the deemed Modvat credit wrongly availed nor filed any appeal with the Asstt. Collector, a show cause notice was issued to the appellant on 26-4-1988 asking him to show cause to the Asstt. Collector of Central Excise as to why the wrongly availed deemed Modvat credit amounting to Rs. 13,953.90 should not be disallowed under Rule 57-1 read with Section 11A of the Central Excises and Salt Act, 1944.
3. Shri Naveen Mullick, the Ld. Advocate appearing for the appellant submitted that though the facility of availing deemed Modvat credit was withdrawn w.e.f. 2-11-1987, however, it was circulated by the Mayapuri Industrial Welfare Association on 16-12-1987 and, therefore, it should have been given effect only from the date it was made known to the concerned public. Arguing further on the point of notifying withdrawal of the facility to the trade, the ld. Counsel for the appellant submitted that the earliest date from which the facility should be deemed to have been withdrawn should be that date on which Delhi Central Excise Collectorate issued Trade Notice No. 66/87 informing the withdrawal of the facility of deemed Modvat credit on M.S. Sheets. This Trade Notice was issued by the Collector of Central Excise, Delhi on 3-12-1987. In support of his contention he cited and relied on the ratio of the decision in the case of Gokaldas Harbhagwan Das v.Collector of Customs, Bombay reported in 1987 (29) E.L.T. 379 and in the case of Gulab Impex Enterprises Ltd. v. Collector of Customs reported in 1990 (46) E.L.T. 109 (T).
4. Shri B.D. Bhagat, the ld. JDR appearing for the respondent reiterated the findings of the lower authorities.
5. Heard the submissions of both sides. On careful consideration of the arguments, I find that the ld. Counsel for the appellant cited and relied upon the ratio of the cases which appear to be apt and fully applicable to the facts of the present case. The Hon'ble Tribunal in the case of Gokaldas Harbhagwan Das v. Collector of Customs, Bombay [Paras 27 to 31] had held :- This decision of the Tribunal was further followed by the Tribunal among other decisions including some decisions of the Hon'ble Supreme Court in the case of Gulab Impex Enterprises Ltd. In this case the Tribunal had held [Paras 11 & 12] :- 6. Relying on the decisions of the Tribunal in the two cases cited above wherein a number of decisions have also been discussed in detail.
I find that the case of the appellant is that deemed Modvat credit facility on M.S. Sheet withdrawn w.e.f. 2-11-1987 was made known by the Collector, Central Excise vide his Trade Notice No. 66/87 dated 3-12-1987 and that though this Trade Notice was circulated to the Trade and Industry concerned only w.e.f. 16-12-1987, therefore, in any event the withdrawal of the facility of deemed Modvat credit on M.S. Sheets was intimated to the Trade under Trade Notice No. 66/87 on 3-12-1987.
Having regard to the ratio of the decisions cited (supra) I hold that the withdrawal of the deemed Modvat credit facility to the appellant in the instant case will be applicable only w.e.f. 3-12-1987. Having regard to these findings, deemed Modvat credit can be disallowed only w.e.f. 3-12-1987.
7. But for the above modification the impugned order is upheld and the appeal is disposed of accordingly.