SECALS LTD Vs. CCE

JUDGEMENT

(1.) THIS is an appeal filed by the appellants against the orders passed by the Collector (Appeals) in Order No. 40/92 (M), dated 31.3.1992. In terms of that order, the appeal filed by the appellant was dismissed. The facts of the case, in brief, are that the appellants are manufacturers of steel and stainless steel castings falling under sub -heading No. 8481.99. From the inception of Modvat Scheme in April, 1986, they were availing input credits on various goods including oxygen and acetylene after filing necessary declaration under Rule 57G of Central Excise Rules, 1944. Consequent to the isssue of Trade Notice No. 109/88 dated 7.6.1988 by the Madras Central Excise Collectorate to the effect that Modvat credit was not admissible to Oxygen and Acetylene gases when used exclusively for cutting runners and risers for welding purposes, they expunged a sum of Rs. 1,24,251.18 on 21.6.1988 towards credits so taken by them from April 1986 onwards. Later another Trade Notice bearing No. 113/90 dated 19.7.1990 was issued by the Madras Central Excise Collectorate based on Board's letter F. No. 267/108/89 -CX, dated 31.5.1990 whereby it was stated that upon re -examination it has been decided to extend the benefit of Modvat credit to oxygen and acetylene gases inasmuch as they are used as a source of heat and flame generating for welding/cutting. As such, based on this, the appellant had sent a letter dated 13.11.1990 to the Assistant Collector stating that in view of the revised Trade Notice dated 19.7.1990, they would be re -crediting a sum of Rs. 1,24,251.18 earlier expunged by them on 21.6.1988 and accordingly done so on 15.11.1990. The jurisdictional Range Officer who felt that the action of the appellant in re -crediting the impugned amount without obtaining the permission from the Department that too after a lapse of 27 months from the date of earlier expungment was an irregularity, served a show cause notice dated 9.4.1991 on the appellant proposing to demand the said amount under Rule 57 -1 of Central Excise Rules, 1944. After observing the usual formalities, the Assistant Collector passed an order dated 22.5.1991. The above said order was appealed against, by the appellant. But the learned Collector (Appeals) dismissed the appeal. Against that order, the present appeal is filed.

(2.) THE learned Consultant Shri M.S. Kumaraswamy appearing for the appellant contended before us that the Trade Notice No. 109/88 dated 7.6.1988 was withdrawn by a later Trade Notice dated 19.7.1990. Shri Kumaraswamy stated that in terms of the above Trade Notice dated 19.7.1990, the issue whether Modvat Credit is admissible to oxygen and acetylene gases when they are used exclusively for cutting runners and risers on castings for welding purposes was re -examined and it was considered that Modvat Credit is admissible to such gases in view of the fact that they are used as a source of heat and flame generating for welding. He also pointed out that in the same Trade Notice it was mentioned that the previous Trade Notice No. 109/88 where such benefits were denied was withdrawan. Shri Kumaraswamy, therefore, contended that in view of the latter Trade Notice, the Modvat Credit was eligible to the appellants. It was in view of that matter, the appellants took credit of the same even though after a lapse of 27 months. It was contended before us that in view of the latter Trade Notice dated 19.7.1990, the earlier Trade Notice dated 7.6.1988 is deemed to have been withdrawn. He also stated that the appellants vide their letter dated 8.9.1988 has clearly mentioned that they want speaking order to the effect whether they are eligible or not for availing the Modvat Credit in order to take further steps. It was therefore contended that the appellants are entitled to take credit and the reversal of the same under Rule 57 -1 of the Central Excise Rules, 1944 is not in accordance with law.

(3.) THE learned DR drew our attention to the impugned order and justified the same.