LAKSHMI MACHINE WORKS LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturers of textile machinery and spares thereof. They used to supply their products to 100% EOUs, without payment of duty, against CT -3 certificates. AR3As are raised at the time of clearance of the products and the same are returned to the appellants after rewarehousing. Some of these AR3As with re warehousing certificates endorsed thereon are received by the appellants within the period of 90 days prescribed under Rule 156 B of the Central Excise Rules, 1944, and others are received after this period. In respect of the rewarehousing certificates received beyond 90 days, the appellants used to pay the applicable duty through debits in Cenvat Account and intimate the same to the Range Office. In one such instance, they intimated debit of an amount of Rs. 1,44,165/ - in Cenvat Account to the Superintendent of Central Excise by letter dated 01.03.1999, wherein they also requested for permission to take recredit of the amount upon receipt of rewarehousing certificate. For a part (Rs.51,547/ -) of this amount of Rs. 1,44,165/ -, the appellants took such recredit later on, as they did not receive any response from the Department. Later on, the Department came out with a show -cause notice proposing to disallow the above credit. This proposal was contested. Both the original authority and the first appellate authority upheld the Department's proposal and demanded the above amount of Rs. 51,547/ - from the assessee. Hence this appeal.

(2.) HEARD both sides. Ld. Counsel for the appellants submits that, though by mistake they had operated the Cenvat Account under Rule 156 B, it was not open to the Department to disallow the credit to them after having slept over their request for permission to take recredit. In this connection, Counsel refers to the Tribunal's decision in Medicamen Biotech Ltd. v. Commissioner of Central Excise, Jaipur -I [2003 (156) E.L.T. 765 (Tri. -Del.)] and Indo -American Electricals Ltd. v. Commissioner of Central Excise, Bolpur [1999 (108) E.L .T. 797 (Tribunal)] and submits that the credit in question was not deniable to the appellants on the ground of non -grant of permission by the Department. Ld. SDR reiterates the findings of the Commissioner (Appeals) and submits that the case law cited by ld. Counsel does not squarely cover the issue in favour of the assessee.