Tribunal Clarifies Proforma Credit Rules for Duty Payments on Yarns

The Tribunal allowed the department's application to amend the final order, clarifying that proforma credit for duty payment on doubled/multifolded yarns was not applicable as the process did not amount to "manufacture." The party's claim of not availing proforma credit was accepted based on a previous Tribunal order. The Tribunal acknowledged the mistake in the original order and amended it to reflect that proforma credit was not available for non-dutiable final products. The Revenue's appeal against the proforma credit claim was allowed only to the extent of clarifying the non-availability of credit.

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Issues involved: Appeal against grant of proforma credit for payment of duty on doubled/multifolded yarns, erroneous final order by the Bench, request for amendment of final order based on Supreme Court decision.

Summary:
1. The department filed an application contending that the final order was erroneous as it did not address the appellant's grievance against the availment of proforma credit by the respondents for duty payment on doubled/multifolded yarns. The process of doubling/multifolding of yarns was held not amounting to "manufacture" by the apex court. The department sought an amendment to the final order in line with the Supreme Court decision.

2. The party did not appear but submitted written submissions stating they do not wish to be personally heard. They mentioned that they did not avail the benefit of proforma credit granted by the Commissioner (Appeals) as they were not required to pay duty based on a previous Tribunal order.

3. The Tribunal noted the party's submissions and the previous Tribunal order where it was held that the process undertaken did not amount to "manufacture." The party claimed they did not avail any proforma credit and that it cannot be availed as per the Tribunal's previous order affirmed by the Supreme Court. The Tribunal acknowledged an apparent mistake in their final order and agreed that there was no question of granting proforma credit where the final products were not dutiable.

4. Consequently, the Tribunal substituted a paragraph in the final order to clarify that there was no question of availing proforma credit on inputs as the final products were not dutiable. The Revenue's appeal against the claim for proforma credit was allowed to this extent only.

5. The application was allowed, and the final order was amended accordingly.

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