Full Judgment
2. Ld. Advocate of the appellant Shri Kamal Jeet Singh admitted that the order was issued by Central Government on 2-11-1987 but they came to know about this only in January, 1988 and in fact the Trade Notice in this regard, as the Show Cause Notice will show, was issued on 3-12-1987. He submitted that Show Cause Notice relies on this Trade Notice for denying the deemed modvat credit facility already taken by them during November and December. He submitted that the exact effective date of notification would be only the date notification is made known by the Govt. He submitted that in such cases, the facility should have been allowed upto the date they came to know of withdrawal of this facility through order dated 2-11-1987 which was issued only in January, 1988 and in fact the officers/department were made aware of this withdrawal of facility only through Trade Notice issued in December, 1987. He cited the following case law in support of his contention:Kiran Spinning Mills v. CCE, Bombay-II -1987 (30) E.L.T. 550 (Tribunal) Poona Bottling Co. Ltd. v. Union of India -1981 (8) E.L.T. 389 (Del.) Surendra Sehgal & Am. & Saraswati Offset Printers v. Union of India and Ors. -1992 (43) E.C.R. 209 (Delhi) He argued that in these cases, it was held that Show Cause Notices were bad in law as issued under directions of Board and that advice from Central Govt. amounted to directions from higher authorities, as Trade Notices were issued for future guidance these cannot operate retrospectively.
3. Ld. DR submitted that Collector (Appeals) has clearly referred to nature of order issued under Rule 57G and in fact this order was issued much before the issue of Trade Notice. The date of order withdrawing the facility alone is taken in such cases as the relevant date.
4. I have given careful consideration to the submission made by both sides and perused the records. The cases cited by the Ld. Advocate are distinguishable. In case of Kiran Spinning Mills (supra) it was held by the Tribunal that Show Cause Notice cannot rely on Trade Notices. The Asstt. Collector has not based his order on them but had recorded his own reasons in his findings and conclusions; and therefore Asstt.
Collectors' order cannot be said to be based on Trade Notice but the same was based on detailed reasons. The case of Surendra Sehgal and Saraswati Offset Printers and Anr. v. Union of India (supra) was concerned with interpreting exemption notification and it was in that context that Hon'ble Court held that reliance placed on Trade Notice is of no avail for the purpose of construing the notification for deciding the validity of relevant order. In case of Poona Bottling Co. v. UOI (supra) the appellant submitted that there was no direction of the Government and the Government simply asked them to examine the issue in terms of Ministry of Law and Justice and Company Affairs advice. It was in this context that the Court held that the advice directions given by the Government of India for all purposes means to direct and this so-called advice was advice coming from the King.
5. Collector (Appeals) in his impugned order has discussed the nature of the order issued under 57G (2) proviso in detail. 57G II provides, in proviso, that no credit shall be taken unless inputs were received in the factory under cover of gate pass or bill of entry or any other documents specified by Central Board of Excise and Customs evidencing payment of duty in such case. Second proviso further authorises the Central Government to issue direction to the effect that with effect from specific date stocks of particular inputs may be deemed to be duty paid and credit, at the rates to be specified, may be allowed without production of documents evidencing payment of duty. Central Government admittedly issued an order on 2-11-1987 withdrawing deemed credit facility in regard to inputs in question. It was not contended before me that this order was not made available to public on the date of issue or that it was issued after the specified date from where the facility was withdrawn. So long as the order under second proviso of Rule 57G(2), was issued before the specified date from which deemed credit facility under Rule 57G(2) was withdrawn, and was made known to the public through normal mode of publication, the order cannot be assailed on the ground that appellants came to know of the order much after it was issued. I therefore do not find force in the contention of the Ld. Advocate that they should be allowed benefit of deemed modvat credit upto the date when they actually came to know about the order.
The case laws cited by the Ld. Advocate are clearly distinguishable as in the present case both original authority as well as Collector (Appeals) have referred to withdrawal of deemed credit provision with effect from 2-11-1987 and have not based the reasons on Trade Notice.
Since the impugned order itself did not rely on Trade Notice as an authority for confirming the demand, mere mention of Trade Notice in the Show Cause Notice after giving full reasons in the impugned order of Collector (Appeals) about denial of modvat credit without documents by virtue of proviso to Rule 57G(2) would not vitiate the demand. See Kiran Spinning Mills (supra).