9911796707
TMI Blog1987 (8) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... eated by the fact that on 17-3-1985 Government issued Notification No. 67/85 exempting computers from duty. Consequently, the benefit of Rule 56A became inapplicable to component parts to be used in the manufacture of computers. 2. The case of the respondents is that the issue of the notification was subsequent to their taking proforma credit for the component parts, and subsequent also to their utilising the credit for the clearance of computers manufactured by them. According to them, the credit which was lawful at the time it was taken and the utilisation of the credit which was lawful at the time of utilisation should not be affected because subsequently computers were exempted from duty. The case of the Revenue is that in terms of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iece correlation, but it had to be a proportionate correlation. It had even been laid down that wastage had to be properly accounted for. There could therefore be no doubt that the main product, that is, the input had to be properly accounted for. 7. Even assuming that the trade notice, which was said to be based on instructions of the CBEC, could bear the meaning claimed by the respondents, executive instructions could not enlarge or restrict the scope of a statutory provision. Further, the Board's clarification had reference to Notification No. 95/79, which inter alia made the procedure under Rule 56A applicable. The clarification was not with reference to Rule 56A as such. 8. In the show-cause notice, sub-rule (5) of Rule 56A had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Rule 56A. Originally the notification had contained a proviso (ii), which could be considered as calling for one-to-one correlation. But that proviso had been deleted by Notification No. 176/79. Thereafter the provisions of Notification No. 95/79 were parallel to those of Rule 56A. 11. The clarification with reference to Point (5) was quite clear. It stated that the requirement of strict input/output correlation had been dispensed with, and that proforma credit of the duty paid on inputs accrued to the manufacturer immediately on receipt of the inputs in his factory. The reference to disposal of waste was not relevant. It was quite clear that once the inputs had been brought into the factory the credit could be taken. Once it was tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lves searched for guidance from judicial decisions. We have found reference to a decision of the Madras High Court in the case of E.I.D. Parry (India) Ltd., Madras, reported in 1979 E.L.T. 253. This case related to additional duty of customs on rock phosphates used in the manufacture of fertilizers. It appears that proforma credit of the countervailing duty, utilisable against the duty payable on the fertilizers, was admissible, subject to the procedure under Rule 56A. 17. The judgment of the learned single Judge is brief and the facts have also not been set out in detail. Further, the case had reference to Rule 56A(3)(vi), which was differently worded at the time relevant to that case. The judgment is not therefore of direct relevance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for utilisation (which naturally should be consistent with the provisions of the Rule) immediately on receipt of the inputs. The clarification further states that the requirement of strict input/output correlation has been dispensed with. This would mean that in utilising the credit the question of correlation, in the manner relevant where there is a provision for "set-off", would not arise. According to our understanding, it is standard practice in such cases that the amount of duty available through proforma credit could be fully utilised against the duty payable on the finished goods, provided that as a genus, they are the goods in the manufacture of which the inputs are utilised. This we think is how the Central Excise Department in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in respect of computers. 21. It appears to us that in such a situation, where the assessee was acting in good faith and where what he did was not at the time he did it illegal or unauthorised, any action which would impose a liability on him should be something clearly authorised by law. We have, therefore, to see whether there is anything in Rule 56A which authorised the Department to demand back the duty amount in a case like this. It is obvious that, although Rule 56A covers more than seven printed pages, and includes a mass of detail, it does not specifically provide for a case of this nature. 22. Certain provisions have been relied upon by the Department. Of these, sub-rule (v), which was cited in the show-cause notice, and which r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
