The central legal point established in the judgment is the validity of a validating legislation, specifically Section 112 of the Finance Act, 2000, and its impact on the denial of Modvat credit under the Central Excise Act, 1944.

D. V. SHYLENDRA KUMAR, J.

( 1 ) THESE two writ petitions are by assessees under the provisions of the Central Excise Act, 1944 [for short, the Act] in the context of denial of what is known as Modvat credit which the petitioners had availed of in respect of high speed diesel (HSD) oil, which according to the petitioners was used as an input in the production of electricity at their units wherein they manufacture cement. The scheme of availment of Modvat credit under the Act is governed by the provisions of Rules 57a, 57b, 57c to 57v of the Central Excise Rules, 1944 [for short, the rules].

( 2 ) IN the case of writ petitioner in W. P. No. 35766 of 2000, the dispute arose in the context of modvat credit that had been availed by the petitioner on the HSD oil used as input for production of electricity in turn used for manufacturing cement during the period December 1997 to March 1998, which credit though availed of by the petitioner was directed to be reversed in terms of endorsement dated 19-6-2000 issued by the Superintendent of Central Excise, Gulbarga. This petitioner did comply with this suggestion and reversed the Modvat credit and to this extent nothing remains.

( 3 ) HOWEVER, the communication dated 19-6-2000 being on the premise that in terms of Section 112 of the Finance Act, 2000, such Modvat credit having been disallowed, the petitioner was advised to reverse the entry and it is only because of Section 112 of the Finance Act, 2000 the petitioner is losing the valid Modvat credit that it had availed of earlier and but for this provision, the petitioner could have continued to reap the benefit of Modvat credit and the petitioner therefore feeling aggrieved by this endorsement as also the provision of Section 112 of the Finance Act, 2000, has challenged the constitutional validity of this statutory provision and for quashing the consequential endorsement and further direction for restoration of the Modvat credit entry.

( 4 ) LIKEWISE, in respect of the petitioner in W. P. No. 35767 of 2000, the disputes relates to availment of Modvat credit for the period September 1997 to December 1997. However, in this case, the availment of Modvat credit was sought to be denied to the petitioner by issue of show cause notice, which was issued even before the enactment of Section 112 of the Finance Act, 2000 and on an independent ground and on adjudication of the show cause notice, the petitioner was denied this credit for the period and the matter, it appears, became concluded, as the petitioner has not pursued an adverse order it suffered at the hands of CEGAT in the second appeal, but nevertheless, has approached this Court for relief on the premise that the confirmatory order in the second appeal did cite the provision of Section 112 of the Finance Act, 2000 as one of the reasons to uphold the denial of Modvat credit.

( 5 ) RESPONDENTS had been put on notice and entered appearance through Sri B. Papegowda, learned Additional Central Government Standing Counsel, have also filed statement of objections. The common defence put up by the respondents in both these petitions is that the modvat credit though had been availed when it had been allowed, the concession under Rule 57a of the Rules having now been withdrawn as it was done away in terms of Section 112 of the finance Act, 2000 and the Supreme Court in the case of Commissioner of Commercial Taxes, hyderabad v. Associated Cement Companies Ltd. , 2005 (180) E. L. T. 3 (S. C.), while passing orders on the review petition in the appeal of the Commissioner, having taken note of the provisions of Section 112 of the Finance Act, 2000 for reviewing its earlier order of dismissing the appeal and for allowing the appeal of the Commissioner on behalf of Revenue, an appeal which had been preferred against the order of the CEGAT, wherein the Tribunal had held that persons like the petitioners are entitled to avail of the Modvat credit in respect of USD oil if it is an input for productio

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