1992 (9) TMI 188 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal rejecting proforma credit benefit under Rule 56A.
- Validity of Assistant Collector's decision limiting credit to wire rods cleared to specific unit.
- Interpretation of Notification 208/83 and Notification 95/83.
- Applicability of Rule 56A for clearance of final products.
- Challenge to the Order-in-Appeal before the Tribunal.

Analysis:
1. The appeal was filed against the Order-in-Appeal rejecting the proforma credit benefit under Rule 56A. The Assistant Collector's decision limited the credit to wire rods cleared to a specific unit, which was contested by the appellants. They argued that the Assistant Collector's order was invalid and misdirected as they sought permission to avail credit for all wire rods cleared on payment of duty, not just to their Ranchi unit. The Collector (Appeals) upheld the decision, citing Notification 208/83 and Notification 95/83, which the appellants contended were irrelevant to their situation as they only manufactured wire rods in Jamshedpur, not wire ropes.

2. The Tribunal found the appellants eligible for the credit under Rule 56A for all clearances of wire rods on payment of duty, not limited to specific destinations as imposed by the Assistant Collector. The Tribunal highlighted that Rule 56A does not mandate restrictions on where duty paid goods should be dispatched after clearance. The duty paid billets used in manufacturing wire rods were dutiable, making the appellants eligible for the credit. The Collector (Appeals) erred in bringing up Notification 95/83, which was not applicable to the appellants' situation, as they did not manufacture wire ropes.

3. Despite an appellate decision under challenge, the Tribunal focused on the arguments presented and the facts in the impugned orders. The grant of Rule 56A pertained to clearance of final products from a factory and was not conditional on the subsequent use or destination of those products. The appellants' request to avail Rule 56A benefit for wire rods from duty paid billets, irrespective of destination, was deemed valid. The Collector (Appeals) incorrectly upheld the Assistant Collector's order and misapplied Notification 95/83.

4. Consequently, the Tribunal set aside the Order-in-Appeal and allowed the appeal, granting the appellants permission to avail the Rule 56A benefit for manufacturing dutiable wire rods from duty paid billets without restrictions on the destination of such clearances. The decision emphasized the correct interpretation of Rule 56A and the inapplicability of irrelevant notifications in the appellants' case.

Conclusion:
The Tribunal ruled in favor of the appellants, allowing them to avail the Rule 56A benefit for manufacturing wire rods from duty paid billets without limitations on the destination of such clearances. The decision clarified the eligibility criteria under Rule 56A and emphasized the importance of correctly applying relevant notifications in excise matters.