Per V.K.Agarwal :

The issues involved in the appeal filed by M/s Shriram Rayons is regarding the availability of benefit of notification No. 225/86.

2 Shri. A.R. Madhav Rao, learned advocate submitted that the appellants manufacture Rayon yarn and availed of set off of duty paid on inputs while discharging the duty on their final product; that during the period from 17.5.88 to 14.4.89, Department did not allow them to utilise the credit as the Department insisted on 1:1 corelation and maintenance of set off Register. When they asked for refund of the accumulated credit in cash, the Asstt. Collector rejected the refund holding that there is no provision in the notification to allow carry forward of the credit and utilisation thereof for payment of duty on other goods; that the appellants could not produce the material which provides for refund in cash of credit available in balance. The Collector (Appeals) also confirmed the order passed by the Asstt. Collector. The learned Advocate, further, submitted that notification No. 225/86 exempts artificial staple fibre and tow and artificial filament yarn to the extent of duty already paid on the inputs specified in the table annexed to the notification; that they should have been allowed to utilise the credit which has been accumulated only because of the reason that the Department had denied the utilisation of the credit pending determination of one to one correlation between the input and the final product; that it is a settled law that a person or authority cannot take advantage of his or its own mistake; that since the credit had accumulated only on account of the action of the department, they ought to have been allowed to utilise the same. He also mentioned that the Board, under instruction dated 24.7.90, had directed that under Notification No.225.86 credit was permissible on that quantity of duty paid inputs which had been issued for the manufacture of finished excisable goods and Board also clarified that the credit was not confined to the duty on the quantity of inputs actually contained in the finished product. He also referred to the decision in the case of CCE Vs. ITC Ltd., 1992 (42) ECR 818 in support of the proposition that where the notification like 225/86 did not stipulate a condition that set off must be claimed at the time of clearance itself, benefit of set off cannot be denied by way of refund of duty subsequently. He also submitted that export under bond cannot result in denial of the input credit and reliance was placed on Orissa Synthetics Ltd. Vs. CCE; 1995 (77) ELT 350 (T) and Reliance Industries Vs. CCE; 1995 (9) RLT 317 (T) = 1995 (78) ELT 595. He also relied upon the decision in the case of J.K Synthetics Vs. CCE; 1996 (81) ELT 648 wherein it was held that no one to one correlation is required for availing the credit for payment of duty with reference to Notification No.225/86. He finally submitted that they should be permitted to utilise the entire credit accumulated during the disputed period by crediting the same in Modvat Credit Account or the same be refunded in cash.

3 Countering the arguments, Shri R.S. Sangia, learned DR submitted that there is no provision in the notification No. 225/86 for refund of the accumulated credit in cash. He relied upon the final order No. 952/98-D dated 24.11.98 in the case of M/s J.K.Synthetics Ltd. Vs CCE, Jaipur [reported in 1999 (30) RLT 862 (CEGAT)] in which the Appellate Tribunal held that "The Collector (Appeals) finding that notification No. 225/86 is a special concessional provision and it does not provide for any refund of duty paid on the inputs namely MEG is correct in the face of the clear language of notification No. 225/86". He, further, submitted that for the quantity of final products exported, the appellants should follow the procedures already prescribed for refund/ remission of duty paid on the inputs. He mentioned that the appellants cannot be refunded the amount of credit; they can utilise the