SHANKESHWAR FABRICS (P) LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This appeal is by the assessee against the order of the Tribunal dt. 29-8-2006.

(2.) The appeal was admitted on 19-1-2007, by framing the following substantial question of law :-

(3.) The controversy arises in the manner, that on 16-12-1998 a notification was issued in the exercise of powers under Section 3A of the Central Excise Act, the copy whereof is produced as Schedule-A, and according to that the compound levy of duty was prescribed. However, it was stipulated that nothing contained in that notification shall apply to the goods manufactured or produced prior to 16-12-1998, and cleared on or after that date. It appears that in respect of the goods manufactured prior to 16-12-1998 the petitioner was not allowed to avail Modvat credit. Thereafter writ petition was filed before this Court, which came to be allowed vide judgment dt. 22-8-2001 [2002 (142) ELT 42 (Raj.)], copy whereof has been produced as Annexure-A. A perusal of that judgment shows, that thereby four writ petitions were decided, including that of the petitioner, wherein relying upon the judgment of the Hon'ble Supreme Court in Eicher Motors Ltd. v Union of India, 1999 2 SCC 361, it was found, that once the capital goods which have already been utilised, and the credit has been received against their utilisation, then Clause 5 cannot be given retrospective effect, so as to nullify the Modvat credit, which has already been earned by the individual writ petitioner, and that, even Clause 6 of the notification clearly provides a nonobstante clause to the effect, that nothing contained in the notification shall apply to any goods manufactured or produced prior to 16-12-1998, and cleared on or after that date. Consequently, the writ petition was allowed, and the respondents were directed to allow the petitioners to avail the Modvat credit earned by them as on 16-12-1998.