1987 (10) TMI 57 - HC - Central Excise

Summary

Issues Involved:
1. Applicability of Rule 56A(2) of the Central Excise Rules.
2. Entitlement to benefit under Notification No. 193/81-C.E., dated 3-12-1981.
3. Denial of proforma credit of duty paid on raw materials.
4. Alternative remedy and maintainability of the writ petition.

Detailed Analysis:

1. Applicability of Rule 56A(2) of the Central Excise Rules:

The petitioner, a Public Limited Company engaged in manufacturing various aluminum products, was permitted by the Assistant Collector of Central Excise to avail of the concession provided by sub-rule (2) of Rule 56A. This rule allows manufacturers to receive duty-paid materials for manufacturing finished excisable goods and to claim credit for the duty already paid on such materials. The petitioner was utilizing this benefit for aluminum ingots used in manufacturing its products.

2. Entitlement to benefit under Notification No. 193/81-C.E., dated 3-12-1981:

Notification No. 193/81-C.E. reduced the excise duty rates on aluminum products to lower the overall price for consumers. The petitioner was availing of this reduced duty rate for its aluminum products. The notification specified that the reduced rates would apply if the goods were manufactured from aluminum on which duty had been paid at the rates specified in the notification.

3. Denial of proforma credit of duty paid on raw materials:

On 10-8-1982, the Assistant Collector directed the petitioner not to avail of proforma credit for duty paid on aluminum ingots, stating that doing so would render the raw materials 'non-duty paid,' thus disqualifying the petitioner from the reduced duty rates under the notification. The petitioner challenged this order, arguing that the benefit of Rule 56A(2) is distinct from the benefit provided by the notification and that availing of one should not preclude the other.

4. Alternative remedy and maintainability of the writ petition:

The respondents contended that the petitioner should have exhausted alternative remedies provided under the Act before approaching the High Court. However, the court noted that the writ petition had been entertained and an interim order granted five years prior, making it inappropriate to dismiss the petition on these grounds at this stage.

Judgment:

The court held that the benefits under Rule 56A(2) and the notification are distinct and can be availed of simultaneously, provided the petitioner meets the requirements of both. The notification merely reduced the duty rates and did not exempt the goods from duty altogether, thus not affecting the duty-paid status of the raw materials. The court found the Assistant Collector's reasoning flawed and restrained the respondents from enforcing the impugned order dated 10-8-1982 against the petitioner. The writ petition was allowed, and no costs were awarded.