The Modvat credit once availed by making the necessary entries is not irrevocable.

( 1 ) BY this petition under Article 226 of the Constitution of India the petitioner challenges an order dated 12th August, 1994 passed by the Collector (Appeals), Customs and Central Excise, ghaziabad whereby he dismissed the petitioners Appeal No. 116-C. E. /mrt/94 as barred by limitation.

( 2 ) THE petitioner is a manufacturer of audio cassettes which was an excisable item up to 16th may, 1990. By Notification No. 117/90, dated 16-5-1990 audio cassettes were exempted from excise duty. The petitioner was using certain excisable goods as inputs in the manufacture of the said audio cassettes and was claiming credit for the excise duty paid on those inputs under the modvat (Modified Value Added Tax) Scheme. On 17-5-1990, the date on which the audio cassettes ceased to be an excisable item, the petitioner had certain such inputs in stock in respect of which it had claimed credit of a sum of Rs. 1,97,243. 15 paise by crediting the same in the petitioners personal ledger account (hereinafter referred to as the PLA) maintained under the central Excise Rules. After the audio cassettes became exempt from excise duty it adjusted the pla account by debiting the said sum of Rs. 1,97,243. 15 paise on 28-6-1990 and 2-7-1990. It is claimed that later on the petitioner realised that there was no provision in the Central Excise rules under which the credit of duty that was correctly taken under Rule 57g (2) and correctly utilised for the payment of duty under Rule 57f (3) could have been recovered. The petitioner, therefore, filed a refund claim for the said sum on 15-1-1991 contending that the said amount has been debited in PLA account by mistake and inasmuch as the deposit was without the authority of law. This claim was rejected by the Assistant Collector, Central Excise on the ground that the same was not maintainable on merits and was also barred by time under Section 11b. The petitioner filed an appeal to the Collector (Appeals) who dismissed the same by the impugned order dated 12-8-1994 on the ground of limitation only. It is claimed that the credit for duty paid on inputs, having been validly taken under the Modvat Scheme, the same could not be withdrawn because of the final product, namely audio cassettes being exempted from duty and that the payment of duty on the said inputs through the debit entries referred to above was unauthorised by law and amounts to an illegal recovery and, therefore, the period of limitation did not apply.

( 3 ) IN the counter affidavit filed on behalf of the Union of India, it has been claimed that the impugned order is appealable to the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) and the petitioner has an alternative remedy and the writ petition is not maintainable. On merits it is claimed that the credit for duty paid on the inputs was towards payment of Central excise duty on the final product and since no excise duty was payable on the final product no credit was available to the petitioner in respect of the goods that were in stock on the relevant date. The petitioner, therefore, had rightly debited the aforesaid amount to the PLA account. It is claimed that the refund was also barred by time.

( 4 ) I have heard Sri Rajesh Kumar, learned counsel for the petitioner and Sri Shishir Kumar, learned Standing Counsel for the respondents.

( 5 ) THE procedure for payment of excise duty is inter alia provided under Rule 173g of the central Excise Rules, 1944 which provides for the maintenance of an account-current popularly known as personal ledger account. This account has to be opened and maintained by cash payment into the Treasury so as to keep the balance, in such account-current, sufficient to cover the duty on the goods intended to be removed at any time, and every assessee makes the actual payment of the duty by debiting the said account-current before removal of the goods. Under rule 9 no excisable goods shall be removed from any place where they are produced, cur