TMI Blog1986 (6) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Tariff. Notifications 65/73, 67/73 and 68/73 prescribe concessional rate of duty under certain conditions. In terms of Notification No. 17/71 dated 27-3-1971, the duty paid on raw materials could be taken credit of for utilisation towards payment of duty on the finished products. The appellants have been getting raw materials from (i) bazar scrap, (ii) duty-paid fresh unused steel melting scrap from sister concerns, iron in crude form and (iii) reverse scrap. Alloy materials are added and steel ingots are manufactured by the appellants which are used in the manufacture of iron and steel products. Prior to 1-3-1973, steel ingots manufactured from specified scrap were exempted from duty under Notification No. 26/69 dated 1-3-1969. Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on excise already paid on such steel ingots including steel melting scrap. The appellants were permitted to avail the procedure by the Assistant Collector in his letter dated 26-6-1973. However, the appellants were restrained from payment of duty on the finished goods by debiting from the credit taken in RG-23 on the plea that the raw materials could not be co-related with the finished products made out of it. The appellants had to make the payment of duty by debiting from personal ledger account during the period from 1-3-1973 to 28-2-1974. The appellants represented the matter to the Member (Tariff) who also paid a visit to the plants. While so, a notification bearing No. 163/73 dated 25-8-1973 was issued in which strict co-relation be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . An appeal to the Appellate Collector was also rejected on 30-5-1985. Hence the present revision, now treated as an appeal. 4. Shri N. Mookherjee, the learned counsel for the appellants submitted that the appellants had moved the authorities for proforma credit which was granted on 26-6-1973. So far as co-relation was concerned he stated that the log book mentioned the details and the identity of the scrap was established. He relied on 1979 E.L.T. (3253) (M/s E.I.D. Parry (India) Limited, Madras) wherein the High Court of Madras has held that there was no obligation on the part of the manufacturer to co-relate the Rock Phosphates imported to the ultimate finished goods. He submitted that there were no laches on the part of the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that date. He urged that the appellants had availed the benefit of Notification No. 65/73 and have paid concessional duty. Hence it is not open to them to claim proforma credit. In support of his contention he relied on 1983(2) E.T.R. (530) [M/s Associated Cement Company Limited] where the East Regional Bench, Calcutta had held that, Once proforma credit was given to duty-paid goods it had the effect of making them non-duty paid and the procedure laid down was designed to safeguard revenue. He relied on 1981 E.C.R. (190) [M/s. Hindustan Wire Products] Order No. 82-83/86-B1 for the same purpose. He urged that when credit was frozen the appellants had not filed any appeal. The appellants had also not questioned the cancellation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the raw material and the finished product produced from such material in terms of rule 56A. That such strict correlation was required was recognised and acknowledged by ASP when they asked the Board for relaxation of this requirement of the law. During the time beginning 1-3-1973, ASP did not attempt to correlate the products with the raw materials and, in fact, they submitted RG-23 accounts part II only on 14-9-1974 thus depriving the assessing officer of whatever chance he might have had to correlate the raw material with the products manufactured from them. Nor did the factory indicate in their RT-12 and PLA returns during the period beginning 1-3-1973 that they would avail proforma credit for the period they submitted the RT-12 return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in refund of the duty paid. 9. This is not permissible because for one thing, strict correlation was necessary at the time at least upto 24-8-1973 and this has not been done. Furthermore, the party did nothing to facilitate the correlation and instead of establishing correlation between the raw materials and their finished products, they chose to pay duty at concessional rates on their clearances. It is, therefore, no argument for ASP now to say that they had been allowed to avail proforma credit by the Assistant Collector from the beginning of March, 1973; because permission imposes upon the factory the duty to follow the prescribed procedures; it does not exempt them from such procedures and we have seen that they did not follow the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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