1986 (6) TMI 170 - AT - Central Excise

Summary

Issues:
Entitlement to proforma credit without strict co-relation of raw materials with finished products.
Entitlement to credit for a specific period even if assessments were not finalized.

Analysis:
The case involved a dispute regarding the entitlement of the appellants to proforma credit for a certain period without strict co-relation of raw materials with finished products and the entitlement to credit for a specific period even if assessments were not finalized. The appellants, manufacturers of steel ingots and iron products, sought credit under various notifications for utilizing duty paid on raw materials towards finished products. The dispute arose when the authorities rejected the appellants' request for proforma credit and reopening of assessments.

The appellants contended that they had maintained records and submitted necessary documents to establish the correlation between raw materials and finished products. They argued that strict co-relation was impractical due to the nature of their manufacturing process. The appellants also highlighted their continuous efforts to seek proforma credit and emphasized their compliance with the prescribed procedures.

On the other hand, the respondent argued that the appellants had already availed concessional duty rates and could not claim proforma credit retrospectively. They cited legal precedents to support their position that once proforma credit was granted, goods were considered non-duty paid. The respondent also pointed out the lack of adequate documentation proving the correlation between raw materials and finished products.

The Tribunal analyzed the contentions of both parties and observed that the appellants had not followed the prescribed procedures for claiming proforma credit. The Tribunal noted that the appellants had paid duty at concessional rates without establishing the required correlation. The Tribunal emphasized that the appellants' request for proforma credit was essentially a tactic to seek refunds, which would be time-barred.

Ultimately, the Tribunal rejected the appeal, concluding that the appellants' request for proforma credit and reopening of assessments could not be granted due to the lack of proper correlation between raw materials and finished products, as required by the law. The Tribunal upheld the decision of the authorities to deny the appellants' request for credit and reopening of assessments.

In summary, the Tribunal's decision emphasized the importance of complying with the prescribed procedures and establishing a clear correlation between raw materials and finished products to claim proforma credit. The appellants' failure to meet these requirements led to the rejection of their appeal.