JAY BHARAT FABRICS MILLS LTD. Vs. CCE

JUDGEMENT

(1.) M /s. Jai Bharat Fabrics Mills Ltd. have filed the present appeal against Order -in -Appeal No. 49/2003 dated 31.1.2003 regarding lapsing of Modvat Credit.

(2.) WE heard Shri R. Sudhinder, learned Advocate for the Appellants, and Miss Charul Baranwal, learned SDR for the Revenue. The learned Advocate submitted tat the Appellants are challenging vires of Sub -rule (7A) of Rule 57H of the Central Excise Rules, 1944 inserted by Notification No. 11/2000 -CE(NT) dated 1.3.2000. This Sub -rule reads as under:

(3.) IT is the contention of the learned Advocate tat Modvat Credit, which has acrrued legally to them, cannot be allowed to lapse by inserting a Sub -rule (7A) in Rule 57H; tat it has been held by the Supreme Court in the case of Eicher Motor Ltd. v. UOI tat "when on the strenght of the rules available certain acts have been done by the parties concerned, incidents following thereto must take place in accordance with the scheme under which the duty had been paid on the manufactured products and if such a situation is sought to be altered, necessarily it follows tat right, which had accrued to a party such as availability of a scheme, is affected and, in particular, it losses sight of the fact tat provision for facility of credit is as good as tax paid till the tax is adjusted on future goods on the basis of several commitments which would have been made by the assessees concerned. Therefore, the scheme sought to be introduced cannot be made applicable to the goods which had already come into existence in respect of which the earlier scheme was applied under which the assessee had availed of the Credit facility for payment of taxes." The learned Advocate mentioned tat the Supreme Court, therefore, held tat Section 37 of the Central Excise Act does not enable to authority concerned to make rule for lapsing of the balance Modvat account. Reliance has also been placed on the decision in the case of Sankeswar Fabrics (P) Ltd. v. UOI .