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TMI Blog1985 (7) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturers of PVC Flexible Films and Sheeting s falling under Central Excise Tariff Item No. l5-A (2) and also of PVC Leather Cloth with Cotton back and PVC Leather Cloth with Rayon back falling under Central Excise Tariff Item No. 19-III and 22(3) respectively. The Assistant Collector by his order dated 24-2-1972 as well as by his order dated 2.5.75 granted permission to the appellants to avail of proforma credit in respect of Central Excise duty paid on PVC Films and Sheets used in the manufacture of PVC Leather Cloth with Rayon back in terms of rule 56-A of the Central Excise Rules, 1944, read with notification No. 75/71 dated 29-5-1971. On 22-3-1977 the appellants were directed by the jurisdictional Supdt. to stop availing of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 75/71 dated 29-5-1971, PVS Sheets and Films are exempt from Central Excise Duty when used in the manufacture of Textile Fabrics falling under Central Excise Tariff Items 19, 22, and 22-B. When such sheets and films are used elsewhere than in the factory of production proforma credit in respect of duty paid on such sheets and films is admissible as per proviso to notification No. 75/71 dated 29-5-1971. The premises where PVC Films and sheets are manufactured are distinct and separate from the premises where the Textile Fabrics falling under Tariff. Items 19 and 22 are manufactured. The premises are separately declared to Central Excise Dept. and separately licensed. Therefore, the appellants are entitled to proforma credit in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before withdrawing the permission granted. Sub-Rule (4) of Rule 56-A empowers the Collector to withdraw the permission granted under sub-rule (2) if there is a breach of Rule 56-A by the manufacturer. Even though sub-rule (4) does not provide for giving an opportunity or for hearing the manufacturer, rules of natural justice require giving of an opportunity before the permission is withdrawn. When that was so the withdrawal on the ground that the permission granted was not in accordance with law should have been preceded by a show cause notice, but then no such show cause notice was issued, no opportunity was granted to the appellants and they were not also heard in the matter. On this ground alone the orders passed by the authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le (2)(ii) of Rule 56-A comes in the way. The Assistant Collector as well as the Appellate Collector apparently lost sight of clause (b) of sub-rule (2)(ii) of Rule 56-A. The effect of proviso to sub-rule (2) of Rule 56-A would be (1) proforma credit cannot be allowed if the excisable goods produced by the manufacturer are exempted from whole of the duty of excise leviable thereon or are chargeable to nil rate of duty and (2) If the inputs and the finished excisable goods do not fall under the same tariff item. But then having regard to sub-clause (b) of clause (2)(ii) of the proviso to Rule 56-A (2) credit cannot be denied even if the inputs and the finished excisable goods fall under different Tariff items, if the Central Government has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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