1985 (7) TMI 247 - AT - Central Excise

Summary

Issues:
1. Transfer of Revision Application to the Tribunal
2. Validity of permission to avail proforma credit
3. Interpretation of Rule 56-A regarding proforma credit

Issue 1: Transfer of Revision Application to the Tribunal
The Revision Application filed before the Government of India against the Order-in-Appeal was transferred to the Tribunal for being heard as an appeal.

Issue 2: Validity of permission to avail proforma credit
The appellants, manufacturers of PVC products, were granted permission to avail proforma credit for Central Excise duty paid on certain materials. However, the authorities directed them to stop availing of the credit, stating that the permission was invalid as the duty paid did not align with the finished excisable goods' tariff items. The Assistant Collector and the Appellate Collector upheld this decision, emphasizing the requirement that the duty paid for materials must align with the finished goods' tariff items.

Issue 3: Interpretation of Rule 56-A regarding proforma credit
The appellants argued that under a specific notification, they were entitled to proforma credit as the duty on certain materials was remitted when used in the manufacture of specific goods falling under different tariff items. They contended that the authorities misinterpreted Rule 56-A by not considering the provision allowing credit if the Central Government sanctioned remission for the inputs used. The authorities failed to acknowledge this provision and wrongly denied proforma credit based solely on the tariff item misalignment.

The Tribunal found that the authorities erred in denying proforma credit solely based on the different tariff items of inputs and finished goods. They overlooked the provision allowing credit if the Central Government sanctioned remission for the inputs used. As a result, the Tribunal set aside the orders of the authorities, allowing the appeal and reinstating the appellants' right to avail proforma credit.