1984 (1) TMI 305 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 166/79 and its impact on proforma credit procedure.
2. Validity of continued availment of proforma credit after rescission of Notification No. 166/79.
3. Compliance with Rule 56-A and Notification No. 201/79 for proforma credit.

Analysis:
The case involves a dispute regarding the appellants' entitlement to proforma credit under Rule 56-A of the Central Excise Rules, specifically related to the use of duty-paid parts for manufacturing motor vehicles. The Collector of Central Excise disallowed the credit taken by the appellants during a specific period and ordered recovery due to the rescission of Notification No. 166/79. The Assistant Collector held that the permission granted was limited to the scope of the rescinded notification, leading to the disallowance of credit and recovery orders.

The Appellate Collector upheld the decision, emphasizing the need for fresh permission post-rescission. However, the appellants argued that the rescission of Notification No. 166/79 did not invalidate their continued use of proforma credit due to subsequent notifications and amendments. The Departmental Representative highlighted Rule 56-A provisions, emphasizing the necessity of specific sanction for duty remission post-rescission.

The appellants contended that the amendment of Rule 56-A post-rescission allowed for continued use of proforma credit, as motor vehicles remained under the specified category. They maintained compliance with procedural requirements, including timely intimations and returns. The Tribunal analyzed the evolution of relevant notifications, such as No. 166/79 and No. 201/79, and concluded that substantial compliance with the prescribed procedures justified the appellants' continued use of proforma credit post-rescission.

The Tribunal found that the appellants' actions aligned with the procedures outlined in the notifications, leading to a ruling in favor of the appellants. The Tribunal allowed the appeal, directing the grant of consequential relief within a specified timeframe. The judgment emphasizes the importance of procedural compliance and the impact of notification amendments on the entitlement to proforma credit, ultimately resolving the dispute in favor of the appellants.