TMI Blog1988 (6) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... edit/set off of duty, in terms of Notification No. 95/79-C.E. as amended by Notification No. 58/82-C.E. as well as under Notification No. 201/79-C.E. as amended in respect of tyres manufactured and cleared by them as O.E. tyres cleared under bond under Chapter X procedure. A notice was issued to the appellants proposing the denial of their claim for set off/ proforma credit under Notifications Nos. 95/79 201/79-C.E. in respect of inputs used by them in the manufacture of those tyres which were cleared without payment of duty under bond for home consumption. The Asstt. Collector after hearing the appellants extended the benefit. The Departmertt went in appeal against the Asstt. Collector s order dated 22-6-1983. The Collector allowed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 201/79 to the effect that nothing contained in the said notification shall apply to the said goods (outputs) which are exempted from the whole of excise duty leviable, Shri Chakraborthy argued that in the Notification No. 201/79 this proviso was inserted though it was not necessary to do so. He submitted that such a necessity did not arise because the position was so obvious but still the proviso was inserted because even so obvious a position is sometimes missed. In sum, the Ld. JDR argued that the goods appearing in column 3 to the Notification No. 95/79 should be used in the manufacture of the final products mentioned in column 5 thereof on which duty has been paid. 4. We have considered the arguments of both sides. The appellants p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of the final products specified in the corresponding entry in column (5) of the said Table against the said serial number; (ii) where the duty of excise leviable on any final product is less than the amount of duty of excise (including special duty of excise aforesaid) or the amount of additional duty aforesaid, as the case may be, paid on the inputs used in the manufacture of such final product, the extent of exemption shall be restricted to the duty of excise leviable on such final product; and (iii) in relation to the exemption under this notification the procedure set out in Rule 56A of the aforesaid rules is followed. THE TABLE Sl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be allowed, the High Court referred to an amendment made by the Notification No. 134/80-C. E, adding a proviso to the earlier rebate under Notification No. 108/78 and observed that the amendment merely made explicit what was implicit. No such position prevails in the present matter. 8. We therefore hold that to terms of Notification No. 95/79 there need not be any nexus between the Inputs and outputs. We are further supported in this view by a judgment of the Cegat (SRB) (CCE Bangalore v. Wipro Information Technology, Bangalore) reported in 1988 (14) ECR 490 wherein it was held that proforma credit once allowed cannot be recovered subsequently even if finished goods are exempted later on, making proforma credit ineligible, since n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the extent of exemption that will be available will also be nil or in other words, extent of credit that can be taken will also be nil. 11. In the present case, the issue is the availability in terms of the exemption notification of the set off in respect of the tyres cleared without payment of duty as original equipment. Inasmuch as, no duty in respect of these tyres has been paid, in terms of proviso 2 to the notification, the availability of the credit on the inputs in respect of these tyres will have therefore, to be nil. 12. In view of this, I hold that the credit on duty taken in respect of the inputs used in the manufacture of the tyres which have been cleared without payment of duty was not available to the appellants. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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