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TMI Blog1987 (4) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... r plain), pressure pipes and couplings etc. The principal raw materials used for the manufacture of the asbestos cement products are cement and asbestos fibre. In respect of these raw materials or components used in the manufacture, the assessee pays excise duty. Tariff duty is paid under Tariff Item 22F on asbestos fibre and under Tariff Item 23 of cement. In respect of imported asbestos fibre additional duty, i.e. countervailing duty, equal to Excise duty, is paid. 3. The products manufactured by the assessee are notified by the Central Government under Rule 56A(1) of the Rules as one of the specified excisable goods in respect of which the proforma Credit Procedure under Rule 56A(2) is applicable. The asbestos cement products are listed as Serial No. 11 of the list of such specified goods (Vide Notification No. 223/62, dated 29-12-1962). 4. The assessee made an application dated 13-5-1983 to respondent No. 3 herein. In the said application the assessee requested that it may be permitted to avail the procedure under Rule 56A in respect of the aforesaid two duty paid materials and components received in its factory and used in the manufacture of asbestos cement products. Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down in sub-rule (2) shall apply. (2) The Collector may, on application made in this behalf and subject to the condition mentioned in sub-rule (3) and such other condition as may, from time to time, be prescribed by the Central Government, permit a manufacturer of any excisable goods specified under sub-rule (1) to receive duty paid material or component parts in his factory for the manufacture of these goods and allow a credit of the duty already paid on such material or component parts, under proforma credit account as in Form No. 23". Quickly thereafter, on 8-1-1963, a proviso was asked after sub-rule (2). The proviso was in the following terms :- "Provided that no credit of duty shall be allowed in respect of any material or component part used in the manufacture of finished excisable goods unless :- (a) duty has been paid for such material or component part under the same items or sub-items and at the same rate as is appropriate to the finished excisable goods; or (b) remission or adjustment of duty paid for such material or component part has been specifically sanctioned by Central Government." Thereafter, on 26-10-1963, some more changes were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t parts, the credit allowed shall be varied accordingly by adjustment in the credit account maintained under sub-rule (3) or in the account-current maintained under sub-rule (3) or Rule 9 or Rule 178(1) or, if such adjustment be not possible for any reason, by cash recovery from or, as the case may be, refund to the manufacturer availing of the procedure contained in this rule." 7. With effect from 1-8-1983 Rule 56A underwent further changes. But, these changes do not affect the proposition of law under consideration in the present case. It is, therefore, enough if Rule 56A, as was substituted with effect from 20-12-1968 by Notification No. 203/68, is considered. There is no difficulty in appreciating the scope of sub-rules (1) and (2) of Rule 56A. It is clear that credit of duty shall be allowed in respect of any raw materials or component parts in the manufacture of finished excisable goods subject, however, to the condition that the Central Government notifies, under sub-rule (1), the finished excisable goods in respect of which the procedure laid down in sub-rule (2) shall apply. All that is required under sub-rule (2) is that the person claiming credit of duty should satisfy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents. 8. Sri K. Srinivasa Murthy, learned Counsel for the assessee submits that the aforesaid interpretation sought to be placed by the respondents is wholly untenable. It is urged that though the proviso was first added on 8-1-1963, the Central Government has been issuing notifications regularly thereafter notifying a variety of finished goods for the purpose of proforma credit under Rule 56A(1). Learned Counsel points out these notifications are spread over the period 1963-85 and in most of the cases of finished goods notified under sub-rule (i) duty is not paid under the same Tariff Item, inasmuch as duty is payable under different Tariff Items in respect of raw materials and component parts used in the manufacture of such notified finished goods. Learned Counsel claims that if the intentions is that proforma credit shall not be allowed unless duty is paid under the same Tariff Item in respect of the finished products as well as raw materials and component parts used in the manufacture of finished products, no purpose is served by the notifications issued under sub-rule (1). Learned Counsel invites attention to the list of principal raw materials used in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen a person will be entitled to the benefit of that exemption irrespective of Rule 56A. That being so, the general power to exempt payment of duty either wholly or partly under Rule 8 need not be confused with the provisions contained in Rule 56A. 9. We have given our careful consideration to the rival submissions. The argument advanced by Sri K.Srinivasa Murthy are undoubtedly attractive and no clear explanation is forthcoming as to why notifications are being issued from 1963 to 1985 specifying a variety of goods manufactured for entitlement of the procedure laid down in Rule 96A(2) if the intention of the Legislature is that the said procedure should be made available only to cases where duty is payable under the same Tariff Items in respect of the finished excisable goods on the one hand and the raw materials and component parts used in the captive consumption on the other. Even so, we cannot ignore the real effect of the proviso to Rule 56A. In our opinion, the terms contained in the proviso admit of no doubt whatsoever. We are unable to accept the contention of the learned Counsel for the petitioner that the proviso works in a direction different from the main provisions c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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