Case Law Details
The modvat credit availed by the assessee was used for payment of excise duty, though under protest and there is no provision for cash refund of such duty paid through modvat credit. It is also relevant to consider Rule 57L of the Rules which says that no credit of money on the inputs used in the manufacture of the final products shall be allowed if the final products are exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. In this case, by the time of the judgment of this Court, the duty was paid from the input credits availed by the assessee. Both the authorities concurrently held that those credits cannot be reversed and there is no provision for reversal of the same.
But the Tribunal directed that RG23A Part II should be ordered to be credited with the debits of duty made in the RG23A registers and the Department was given liberty to take such action as permissible under law to deny the availment of modvat claim. Since, in the instant case, the said credit was utilized for payment duty, we do not think it proper to direct the authorities to reverse the entries in RG23A registers by giving them liberty to deny the availment of modvat claim at a later point of time. Such a course of action has no sanction in law. The learned counsel for the assessee also could not show us any provision of law for reversal of entries, as ordered by the Tribunal.
In the circumstances, we are of the opinion that the view taken by the Tribunal for reversal of entries in RG23A Registers consequent to the orders of this Court in W.P.No.22078 of 1997 and batch dated 02.02.1998 is not correct. In view of the same, we hold the substantial questions raised in the appeal in favour of the Revenue and against the assessee.
Andhra Pradesh High Court
THE HONBLE SRI JUSTICE DILIP B.BHOSALE AND
Please become a Premium member. If you are already a Premium member, login here to access the full content.
