KRISHNA MOHAN BEVERAGES AND Vs. CCE

JUDGEMENT

(1.) The appellants are manufacturers of aerated waters and beverage syrups falling respectively under Chapters 22 and 21 of the CETA Schedule. In terms of Notification No. 21/99 -C.E. (N.T.), dated 28 -2 -99, the appellants were entitled to take credit of Special Excise Duty specified in the Second Schedule to the CETA. This Notification was amended on 1 -3 -2000 and, consequently, Mod -vat credit of Special Excise Duty could be taken only on certain specified goods w.e.f. the said date. Goods falling under Chapter 21 were not so specified. As the appellants continued to take Modvat credit of Special Excise Duty on their inputs falling under Chapter 21 in March, 2000, the department by show cause notice proposed to disallow the credit. The proposal was contested. The original authority upheld the department's stand and disallowed to the party Modvat credit of Rs. 3,60,967/ - taken in respect of their input "Concentrate" on the basis of two invoices, one dated 28 -2 -2000 and the other dated 12 -3 -2000. That authority also imposed a penalty of Rs. 10,000/ - on the assessee. The appeal preferred by the assessee against the decision of the original authority to the Commissioner (Appeals) did not succeed. The order of the Commissioner (Appeals) was, therefore, taken in appeal to this Tribunal and the Tribunal remanded the substantive issue raised by the assessee, to the Commissioner (Appeals). The present appeal is against the order passed by the Commissioner (Appeals) in the remanded proceedings.

(2.) Heard both the sides. Restating the substantive issue in this case, ld. Counsel for the appellants submits that, as the right of the assessee to avail Mod -vat credit of Special Excise Duty on input had accrued to them on the date of clearance of the input under the relevant invoice on payment of such duty by the input -supplier, such right would not be affected by the amendment brought to Notification No. 21/99 -C.E. (N.T.). Counsel submits that the amending notification did not provide for retrospective operation of any provision contained therein and hence did not in any way affect the vested right of the assessee as held by the Supreme Court in the case of Eicher Motors Ltd. v. U.O.I. [1999 (106) E.L.T. 3 (S.C.)]. Ld. Counsel has referred to Para 6 of the Apex Court's judgment. Reliance is also placed on the Apex Court's decision in Samtel India Ltd. v. CCE, Jaipur [2003 (155) E.L.T. 14 (S.C.)J. Referring to the Board's Circular dated 31 -3 -2003 relied on in the impugned order, Counsel submits that the said Circular has been set aside by the Karnataka High Court in the case of Grasim Industries Ltd. v. C.B.E. & C, New Delhi [2004 (163) E.L.T. 10 (Kar.)].

(3.) Ld. DR submits that, in the case of Eicher Motors, the issue related to Rule 57F rather than to Rule 57A and, therefore, the Apex Court's ruling may not be applicable to the instant case involving Rule 57A. DR reiterates the argument with reference to Samtel India (supra) which followed Eicher Motors (supra). Referring to the facts of the case, ld. DR submits that, even on the basis of the case law cited by the ld. Counsel, the credit taken by the assessee on the strength of invoice dated 12 -3 -2000 would not be admissible to them inasmuch as the duty on the input covered by that invoice was paid after 1 -3 -2000.