9911796707
TMI Blog1986 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant received calcined alumina on payment of duty under Tariff Item 68 in its factory at Kanjikode West Palghat for use in manufacture of fused alumina grains and mullite grains. Duty paid on calcined alumina was credited in proforma credit account in terms of Rule 56A after taking the permission of the departmental authorities. Certain quantities of final products, namely alumina grains and mullite grains were dispatched to another factory of the appellants without payment of duty in terms of notification 118/75. Since the final products were not liable to duty in terms of the said notification and no duty was actually paid on those final products, credit of duty paid on the input, namely calcined alumina was recovered by the Asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the amount of duty suffered and taken credit of by the assessee which was @ 5% ad valorem whereas the duty on the date of the order (passed by the Asstt. Collector) was 8% which rate should have been made applicable in making a demand as per the order. 3. The appellants have urged that all the formalities such as giving information regarding material received etc. under Rule 56A were duly complied by their factory at Kanjikode. The factory records were all subjected to scrutiny at various times by the excise officials in charge of that factory and at no time, they informed the appellants about any irregularities in that respect. The appellants further urged that had the Excise authorities informed them about the fact that duty had to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 184) = 1979 E.L.T. 3307). Observations of the Hon ble High Court are as follows :- A reading of clause (v) of Rule 56A(3) which has been set out in full hereinbefore, would clearly disclose that the said cause is wholly irrelevant and inapplicable on the basis of the allegations contained in the show cause notice itself. Clause (v) provides for collection of duty in cases where the material or component parts in respect of which credit has been allowed under sub-rule (2), are not duly accounted for as having been disposed of in the manner authorised by the said Rule. In other words, if the material or component parts are not used for the specified purpose but are diverted for some other purposes or disposed of otherwise, the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of Section 35A(3)(b) as it stood at that time. Next plea of the appellants is that the provision of Rule 9A(3A) would be applicable only if the duty is assessed on the inputs as such on which credit of duty under Rule 56A had been allowed. The contention of the appellants is that a wrong credit had been allowed on the input on various dates between 2-11-1978 to 7-2-1979. The rate of duty on the input during this period remained at 5% and only that much credit of duty was taken in the proforma credit account. It is only this amount at best which could be recovered by the department and not the notional amount on the date (4.10.80) of passing of the order by the Asstt. Collector. We find force in this plea of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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