K. Sankararaman, Member (T)

1. These three stay petitions along with their corresponding appeals filed by the Collector of Central Excise, Patna, are directed against three orders in appeal passed by the Collector of Central Excise (Appeals), Calcutta, whereby he allowed the appeals filed by the present respondent, M/s. Telco, Jamshedpur, and held that the disallowance of Modvat Credit in respect of hydraulic jacks and tool kits supplied along with the motor vehicles was not in order, as the time limit prescribed under Section 11A had expired. In the appeals before us it has been urged that rectification of Modvat credit wrongly availed is specifically and separately provided for in Rule 57 I itself, and, accordingly, the matter was regulated and disposed of by the lower authorities under that provision, and that the Collector (Appeals) was in error in applying the time limit in terms of Section 11A, which, it was contended in the appeal, has got no application in the present matter. As the Bench felt that the issue covered in the stay petition and the appeal themselves could be disposed of together, we proceed to take up the appeals straightaway. This will have the effect of rejecting the stay applications made by the applicant Collector.

2. As regards the merits of the issue as set out in the appeal, Sri Biswas, learned SDR appearing on behalf of the appellant Collector, stated that, as pointed out in the appeals themselves the application of tune limit in respect or wrong availment of Mod-vat Credit was introduced in Rule 57 I only with effect from 6-10-88, and as the present group of appeals deal with cases which had arisen prior to the said date, they cannot be circumscribed by the time limit of six months and the longer time availed of in the present case could not be hit by time bar. He also urged that the provisions of Section 11A and Rule 57I are independent of each other as judged from the language and scope of application. He submitted that the appeals filed by the Collector may be allowed as this has a recurring effect on the Revenue.

3. Sri V.R. Srinivasan, Asstt. Manager, Finance of the respondent company appears on behalf of the respondent. He submitted that, recently a trade notice has been issued by the Calcutta II Collectorate, which has been reproduced in a recent issue of the Excise Law Times. He handed over a Xerox copy of the said publication. It is seen that the said extract of trade notice which is dated 18-7-89 clarifies that Modvat credit of duties paid on tool kits and jack assembly would be admissible provided such tool kits/jack assembly are supplied along with motor vehicles and their value is included in the assessable value of the motor vehicles. He also stated that the Range Supdt. of their own factory has fallen in line with this practice, and presently they are permitted to avail of Modvat Credit in respect of tool kit/jack assembly. He handed over a copy of the letter of the said Supdt. dated 11th Sept. 1989, addressed to them permitting them the said benefit. Another copy of a clarification issued by the Pune Central Excise Collectorate regarding the application of Section 11A in respect of Modvat Credit under Rule 57I was also submitted by him. They have received this letter of the Pune Collectorate from the Association of Indian Automobile manufacturers. This letter is to the effect that the question of applicability of time limit for recovery of incorrect Modvat Credit taken in terms of Section 11A vis-a-vis Rule 57I had been examined in the South Zone Collector's Conference, and that it had been decided that, for the recovery of wrong credit taken in terms of provisions of Rule 57I, the time limit prescribed in Section 11A could be applicable. This accords with our view. Actually when any credit taken under the Modvat scheme in the RG 23A Part 2 account is held to be inadmissible and is sought 10 be expunged, the same is regulated in terms of Rule 57I itself, but the effect of that ex