COMMISSIONER OF CENTRAL EXCISE Vs. POLAR INDUSTRIES LTD.

JUDGEMENT

(1.) THE Revenue has preferred this appeal against the order of the Commissioner (Appeals) by which the Commissioner (Appeals) set aside the order of the Deputy Commissioner rejecting the refund claim of Rs. 1,68,771/ - filed by the respondents.

(2.) IT appears from the record that the respondent was a manufacturer of excisable goods and was availing facility of modvat credit during the period from June, 1996 to February, 2000. The respondents sent the inputs for job work to different job workers under the cover of Challans issued under Rule 57F(4) of the Central Excise Rules, 1944, after debiting the amount equal to 10% of the value of inputs as provided under Rule 57F(6). According to the respondents, the goods were received back after the job work under duplicate copy of challans within the stipulated period of 180 days and the credit of amount debited under Rule 57F(6) was taken in terms of Rule 57F(7). However, the respondents subsequently noticed that less credit was taken than the amount debited at the time of sending of the inputs for job work from the factory of the respondents. Therefore, credit for differential amounts was taken by them in the month of October, 2000, i.e. after about three to four years from the respective dates of receiving the goods. According to the Revenue, as per the show cause notice, the details of the inputs sent to the job workers, the amounts debited, and the amounts credited on receipt of the inputs after the job work were shown in the annexure to the show cause notice. Therefore, at the time of auditing the records of the party, it was pointed out that the party had taken the differential amount of credit after expiry of the stipulated period of 180 days and it was, therefore, asked to deposit the amount. Accordingly, the respondents deposited the amount on 13.2.2001 and thereafter the respondents preferred the claim of the said differential amount for refund under Section 11AB of the Central Excise Act, 1944 on 20.12.01.

(3.) BEFORE the Deputy Commissioner, the respondents had raised two contentions namely, Sub -rule (7) of Rule 57F of the Rules did not provide any time limit for taking the credit, and that it only provided that manufacturers shall be eligible for taking the credit of the amount equal to the amount debited by him. It was urged that even if the credit had been taken in installments, the manufacturer was not disentitled for the credit. It was also contended that there was no dispute regarding the receipt of the inputs in the factory within the stipulated period. The Deputy Commissioner held that under Rule 57F(4), there was restriction to the effect that inputs sent for job work should be returned to the factory within 180 days. However, there was no time limit for taking the credit of the amount debited at the time of job work. It was found that the Respondent -manufacturer had taken differential credit after an expiry of three to four years, which cannot by any stretch of imagination be held to be a reasonable period. It was held that even when there was no period specified, the manufacturer could take credit only within a reasonable period. The appellate Commissioner by setting aside the finding of the order in original, held that the outer limit of five years appears to be a reasonable time for refund of the duty amount. The Commissioner while giving this finding, referred to the fact that Central Excise Law recognizes time frames of six months (increased to one year) and five years. Obviously this has reference to the provisions contained in Section 11A pertaining to recoveries of dues not leviable or short levied etc.