Proforma credit limitation under Central Excise Rules barred the demand because notice was issued beyond six months.

A demand for wrongly availed proforma credit was treated as one arising under Rule 56A(5) of the Central Excise Rules, 1944, even though it had been confirmed by reference to Rule 10A. Under Rule 56A(5), where credit is taken by error or inadvertence, notice must be served within six months from the date of such credit. The notice in this matter was served beyond that period, and there was no material to support extension of limitation to five years. The demand was therefore barred by limitation, and the appeal was allowed with refund payable if the amount had already been collected.

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Issues: Whether the demand raised against the appellant for wrongly availed proforma credit was sustainable when the notice was not issued within the period prescribed under Rule 56A(5) of the Central Excise Rules, 1944.

Analysis: The demand was treated as one arising under Rule 56A(5), even though it had been confirmed with reference to Rule 10A of the Central Excise Rules, 1944. Under Rule 56A(5), where proforma credit has been availed by error or inadvertence, notice must be served within six months from the date of such credit. The notice in the present case was not served within that period, and there was no material to justify extending the period to five years. The demand was therefore barred by limitation.

Conclusion: The demand could not be sustained and was barred by limitation; the appeal was allowed and the refund became payable if the amount had already been collected.

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