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Issues:
Challenge to Endorsement by Asst. Collector regarding proforma credit for electrical stampings used in manufacturing die-cast-rotors. Analysis: The petitioner, a government undertaking, challenged an Endorsement by the Asst. Collector, Central Excise, regarding the availing of proforma credit for electrical stampings used in manufacturing die-cast-rotors. The petitioner manufactured electrical motors, and due to capacity constraints, entered into a contract with another company for supplying die-cast-rotors using electrical stampings. The Asst. Collector rejected the petitioner's application for proforma credit, stating that die-cast rotors were fully exempt from duty, making it impossible to correlate stampings with the final products due to additional materials added during processing. The petitioner contended that the stampings, not fully utilized in-house, were supplied to another company for manufacturing die-cast-rotors. The Central Government had issued a notification exempting certain excisable goods from duty, including electric stampings. The notification required following the procedure under Rule 56A for claiming exemption, where electrical stampings were specified as inputs for manufacturing electric motors. The petitioner relied on Rule 56A(7), which allowed the removal of materials for external processing and subsequent return for further use in manufacturing excisable goods. The court acknowledged the relevance of this rule to the petitioner's case, emphasizing the procedural aspect in cases of exemption as per the notification. The court found merit in the petitioner's argument presented by their counsel. The Central Government's Standing Counsel argued that as the stampings returned as finished excisable items, the petitioner was not entitled to proforma credit. However, the Asst. Collector's endorsement did not address the petitioner's specific circumstances, distinguishing between die-cast-rotors as components and the stampings returning as finished products. The court deliberated on whether the petitioner was entitled to proforma credit under Rule 56A(7) for the stampings supplied to the external company for processing. Ultimately, the court ruled in favor of the petitioner, quashing the Asst. Collector's endorsement and remitting the matter for further consideration in accordance with the law and the court's observations. The court allowed the writ petition, directing the Asst. Collector to reevaluate the petitioner's entitlement to proforma credit under Rule 56A(7) based on the provided conditions.
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