PANJON LIMITED Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturer of Purti Tazgi Masala falling under sub -heading No. 2180.90 of the Schedule to the Central Excise Tariff Act, 1985 and are availing Modvat credit on the inputs used in the manufacture of their final products. They had taken Modvat credit of Rs. 1,67,530 on the strength of the Invoices No. 3971 dated 21.2.95 and 3972 dated 21.2.95 issued by M/s. Paper Products Ltd. It was found that the date of issue of these invoices was much before the period of six months from the date of the availment of the credit by the appellants. Therefore, show cause notice was issued to them for disallowing the Modvat credit of Rs. 1,67,530 and after adjudication, the adjudicating authority disallowed this credit and imposed a penalty of Rs. 20,000 on them. On appeal, the Commissioner (Appeals) upheld the order of the adjudicating authority disallowing the credit. However, he set aside the penalty imposed on the appellants.

(2.) SHRI A. Uppadhyay, Ld. Advocate appearing for the appellants pleaded that the invoices on the strength of which the appellants took the Modvat credit pertains to Feb., 1995 and at that time, there was no restriction under Rule 57G of six months to take the credit from the date of invoice. The appellants have cleared the goods under Rule 57F (ii) to its supplier through invoices and debited the amount of Rs. 1,67,530 in the invoice. Since the appellants have already debited the amount of credit taken, there is no question of debiting the same again and if the appellants could not have debited the amount, then there can be question of recovering the same. But since the appellants have already debited the credit, the same should be adjusted against the denial of credit. He relied on the Supreme Court's decisions as under:

(3.) SHRI P.M. Rao, Ld. JDR appearing for the Revenue pleaded that since the appellants have taken the credit in RG -23 A register on the basis of the invoices, which were issued more than six months prior to the date of taking credit, for which the appellants were not eligible to take credit as per proviso to Sub -rule (2) of Rule 57G at the relevant time. The invoices were issued by the input -supplier on 21.2.95 whereas the credit was taken in November 1995. The appellants were not entitled for this credit. Therefore, the department issued show cause notice for recovery of this amount. He relied on the decision of the Supreme Court in case of Osram Surya (P) Ltd. v. CCE, Indore, 2002 (81) ECC 465 (SC) : 2002 (142) ELT 5 (SC), wherein it was held that availment of credit within the introduction of time limit does not take away any vested right. It is only the time limit within which the said right is to be enforced. Hence amendment is prospective in effect.