1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Central Excise (Appeals), Madras and allow the appellants to retain the balance in RG 23 Part-II account to be adjusted against excise duty pending decision of the Supreme Court or on finalisation of assessable value in respect of price lists filed during the period December, 1974 to June 7,1980; in the alternative, refund may be granted as per Rule 56A of the Central Excise Rules, 1944.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri V. Rajamouli, employee of the appellants and upon hearing the arguments of Shri S.K. Choudhury, Senior Departmental Representative for the respondent, the Tribunal makes the following : 3. [Order], - The Assistant Collector of Central Excise, I.D.O.I., Visak-hapatnam, decided that the balances in RG 23 account of the appellants to the extent of Rs. 28,02,965.32 which had accrued one way or the other should be treated as lapsed vide his Order C. No.IV/16/135/81 dated 6-5-1982. He has also refused refund of the amount in cash and observed that "the licence is no longer there and so there is no provision to retain such balances or to refund it". When the matter was raised with the Collector of Central Excise (Appeals), Madras, he regretted his inability to interfere with the Assistant Collector's order noting that in the absence of a specific provision under the Rule in this behalf, their (appellants') other request that they may be allowed to retain such balances and to adjust them against any dues towards duty of excise payable by them in respect of their price lists up to June 7,1980 cannot be allowed vide his order C. No.V/14HH/6/82 dated 3-11-1982. The present appeal is against this order.
4. The representative of the appellants points out that the issue regarding the quantum of duty payable in respect of certain compound fertilisers manufactured by the applicants is pending in proceedings before the Supreme Court; assessments have been made finally but stayed or made provisionally but not finalised because of stay orders. In respect of one fertiliser, N.P.K. 14-35-14, the appellants claim that they are exempt from payment of excise duty. But the department holds otherwise, the issue of durability is also before the Supreme Court; if that Court decides in favour of the appellants, there could be no credit in RG 23 account in respect of the additional duty of customs (countervailing duty) paid on the import of rock phosphate which is used eventually in the manufacture of NPK 14-35-14; if the decision is for the Department the appellants will be entitled to take credit for the additional duty of customs. In this context, the appellants are likely to be called upon to pay duty of over Rs. 2 crores if the decision of the Supreme Court is against them on all counts.
5. Various points were raised on behalf of the appellants about payment of credit in cash; the fact of the appellants holding a licence validated beyond 31-12-1982, though legally they are not expected to have a licence; and the admissibility of adjustment of the credit amount as between RG 23 account and PLA account maintained by the appellants. In the light of what we are setting out below, these issues do not arise for decision.
6. Rule 56A does not provide that when the finished product ceases to be dutiable the credits in RG 23 account have to be wiped out by a specific order. When the final product is not dutiable, the question of collecting any amount from an assessee does not arise. Hence, whether an amount remains in credit in a paper account or not ceases to be relevant. It is perhaps in this context that the Department has been loosely stating that when finished goods cease to be dutiable, the credit in RG 23 account lapses. In a situation like the present one where the appellants may have to face the prospect of payments of much larger sums than the credit admissible to them in RG 23 account, it is only fair that the administrative act of closing RG 23 account and treating all the credits therein as lapsed is not completed until the decision of the Supreme Court is known in respect of the liability of the appellants. In this view we set aside the order of the Collector of Central Excise (Appeals) and order that the credit already granted in RG 23 account be carried till the final decision of the Supreme Court on the pending issues referred to at para 4 is available and the liability of the appellants to pay sums in relation to the finished compound fertilisers is finally determined.