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Issues involved:
The case involves issues related to the eligibility for exemption under Notification No. 95/79-C.E., the rejection of a refund claim by the Assistant Collector, the rejection of the appeal by the lower appellate authority, the retrospective effect of permission granted for despatch of inputs, and the interpretation of Rule 56A(7)(i) of the Central Excise Rules. Eligibility for Exemption under Notification: The appellants, manufacturers of tyres & tubes, claimed exemption under Notification No. 95/79-C.E. for duty paid on synthetic rubber and carbon black used as inputs in manufacturing finished excisable goods. They despatched these inputs to another company for processing, and later filed a refund claim for the duty paid. The Assistant Collector rejected the claim citing non-compliance with Rule 56A and lack of prior permission for despatch. Rejection of Refund Claim: The Assistant Collector rejected the refund claim on grounds including the inputs being considered finished products, failure to follow Rule 56A procedure, and non-submission of required intimations. The lower appellate authority upheld the rejection, stating the appellants did not appeal against the original direction to expunge credit. Retrospective Effect of Permission: The appellants argued for retrospective effect of permission granted for despatch of inputs, citing delays not due to their fault and compliance with Rule 56A(7)(i). The Tribunal noted the delay in permission grant and held that the appellants, who kept the Department informed about despatches, were entitled to the benefit of the exemption notification. Interpretation of Rule 56A(7)(i): The Tribunal emphasized that the benefit of a notification cannot be denied if procedural provisions are substantially followed. It ruled in favor of the appellants, stating that they are entitled to the exemption under Notification 95/79 as amended by Notification 58/82. The Tribunal also addressed the adjustment of credit under Rule 57H and directed the Department to pay the relief amount if credit adjustment was not possible. Consequential Relief: The appeal was allowed, granting consequential relief to the appellants.
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