1988 (4) TMI 222 - AT - Central Excise

Issues Involved:
1. Applicability of Notification No. 58/82-C.E. to inputs received before its issuance.
2. Compliance with the procedure set out in Rule 56-A of the Central Excise Rules.
3. Eligibility for exemption under Notification No. 95/79-C.E. as amended.
4. Timeliness of the refund claim under Section 11-B of the Central Excises and Salt Act, 1944.
5. Admissibility of proforma credit under Rule 56-A.

Issue-Wise Detailed Analysis:

1. Applicability of Notification No. 58/82-C.E. to Inputs Received Before Its Issuance:
The appellants had a stock of Synthetic Rubber, Carbon Black, and Rubber Processing Chemicals on 27.2.1982, claiming that these inputs were duty-paid and used in manufacturing tyres, tubes, and flaps after 1.3.1982. They sought a refund based on Notification No. 95/79-C.E., as amended by Notification No. 58/82-C.E., which became effective from 1.3.1982. The lower authorities rejected the claim, stating that the inputs received before 1.3.1982 were not eligible for exemption as the amending notification did not have retrospective effect.

2. Compliance with the Procedure Set Out in Rule 56-A of the Central Excise Rules:
One of the conditions for availing the exemption under Notification No. 95/79-C.E. was following the procedure outlined in Rule 56-A. The appellants did not follow this procedure, which included making an application to the Collector of Central Excise for permission, giving prior notice before receiving duty-paid inputs, and maintaining accounts in Form RG 23. The appellants argued that it was not possible to follow the procedure before 1.8.1983, when goods falling under Item 16 were brought within the purview of Rule 56-A by Notification No. 198/83-C.E. However, the Tribunal held that the procedure was an essential condition, and non-compliance disqualified the appellants from the exemption.

3. Eligibility for Exemption under Notification No. 95/79-C.E. as Amended:
The Tribunal found that the appellants did not fulfill the conditions of the exemption notification, particularly the procedural requirements of Rule 56-A. Additionally, the inputs were received before the effective date of the amending notification, which did not have retrospective effect. Therefore, the appellants were not eligible for the exemption.

4. Timeliness of the Refund Claim under Section 11-B of the Central Excises and Salt Act, 1944:
The refund claim was filed on 16.8.1982 for duty paid on inputs received before 27.2.1982. Section 11-B requires refund claims to be filed within six months from the relevant date, which is the date of payment of duty. The Tribunal upheld the respondent's argument that the claim was time-barred, as it was not filed within six months from the dates of duty payments on the inputs.

5. Admissibility of Proforma Credit under Rule 56-A:
The appellants argued that they were entitled to proforma credit under Rule 56-A, even though they did not follow the prescribed procedure. The Tribunal noted that for proforma credit to be admissible, the inputs and the final product must fall under the same Tariff Item. In this case, the inputs and final products did not fall under the same item, and the inputs were received before the relevant notification was issued. Therefore, the appellants were not eligible for proforma credit.

Conclusion:
The Tribunal dismissed the appeal, upholding the lower authorities' decision to reject the refund claim. The appellants failed to comply with the procedural requirements of Rule 56-A, and the inputs were not eligible for exemption as they were received before the effective date of the amending notification. The refund claim was also time-barred under Section 11-B of the Central Excises and Salt Act, 1944.

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