The period of limitation provided under Sec. 11A of the Central Excise Act, 1944 would also apply to a demand for recovery of Modvat credit wrongly availed of under Rule 57-I of the Central Excise Rules, 1944.

Aftab Alam, J.

1. Whether the six months period of limitation provided under Sec. 11 (a) of the Central Excise Act would also apply to notice issued under Rule 57-I of the Central Excise Act for recovery of (Modvat) credit wrongly availed of, though the Rule itself, at the material time, was uncircumscribed by any period of limitation ?. This is the primary question in T.C. Nos. 1, 2 and 3 of 1991 (R) and one of the main questions in T.C. Nos. 4 and 5 of 1991 (R) and CWJC No. 3867/1993 (R). These two sets of cases were, therefore, heard together and are being disposed of by this common judgment.

2. Two questions of law, common to T.C. Nos. 1, 2 and 3/1991 (R) (in all of which the common assessee is M/s. Tata Engineering & Locomotive Company Limited) have been referred to this Court by the Customs, Excise & Gold Control, Appellate Tribunal, Calcutta under Sec. 35G(3) of the Central Excise Act on a direction given by this court, at the instance of the Collector, Central Excise, Patna. The two questions on which the Tribunal was directed to state the case and refer to this court are as follows :

" (i) whether provision of limitation as prescribed under Sec. 11A of the Central Excise & Salt Act, 1944 which relates to demand of duty not levied, not paid, short levied, short paid or refunds erroneously granted and does not relate to credit of duty can be engrafted in Rule 57-I of the Central Excise Rules, 1944 for disallowing credit and whether Sec. 11A will over ride Rule 57-I ?

(ii) whether decision in Collectors conference observing application of time limit prescribed in Sec. 11A for the recovery of wrong credit taken in terms of provisions of Rule is binding when there is no time limit prescribed in Rule, 57-I itself?"

3. The Tribunal has submitted a common statement in all the three cases which are as follows :

"The respondent, M/s. Tata Engineering & Locomotive Company Ltd. Jamshedpur and availed themselves of the facility of Modvat credit in terms of Rule 57A of the Central Excise Rules, 1944. Under the said rule, Central Excise duty paid on the goods used in or in relation to the manufacture of the final products can be taken as credit which can be used for payment of central excise duty leviable on such final products. In this case the respondent had taken credit of duty paid on hydraulic jacks and tool kits supplied by them along with their final products, motor vehicles and used the same for payment of duty leviable on such motor vehicles. The credits so taken and utilised by them were disallowed under Rule 57-I of the Central Excise Rules. Their appeals to the Collector of Central Excise (Appeals), Calcutta against such disallowance of credit were disposed of by the said Collector (Appeals) by upholding the orders on merits but partially setting them aside on the ground of limitation (Annexure A). The appeals by the Collector of Central Excise, Patna against such orders-in-appeal were dismissed by this Tribunal upholding the decision of the Collector (Appeals) on the application of the provisions of Sec. 11A of the Central Excise & Salt Act, 1944."

4. The assessee in the other set of cases T.C. Nos. 4 and 5 of 1991 (R) and CWJC No. 3867/1993 (R) is M/s. Bhawani Paper Products (P) Ltd. (formerly M/s. Ashim Paper Products (P) Ltd.). The assessee in these three connected cases is engaged in the manufacture and sale of printing paper. During the period April, 1987 to December, 1987, the assessee had taken Modvat credit of excise duty paid on "Endless P.B. Wire-mesh" & industrial cloth which, according to its case, well required in or in relation to the manufacture of printing paper. The Superintendent of Central Excise, however, disagreed and issued demand-cum-show cause notice, dated 5-1-1988 stating that the two articles on which the assessee had taken Modvat credit were appliances used for producing printing paper and, therefore, those would not qualify as inputs in terms of Sub-sec. (1) of the explanation to Rul