Proforma credit cannot be denied for missing D-3 intimation when duty-paid inputs were received, used, and duly accounted for.

Proforma credit under Rule 56A could not be denied solely because prior D-3 intimation was not given when the duty-paid imported raw material was actually received in the factory, properly accounted for, used in production, and the countervailing duty was later paid after a less-charge demand. The prior notice requirement served verification at receipt, but where receipt, duty-paid character, and consumption were undisputed, the procedural lapse did not defeat the substantive credit entitlement. The later amendment to Rule 56A was also noted as confirming that procedural non-compliance was not invariably fatal.

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Issues: Whether proforma credit could be denied merely because the manufacturer did not give prior D-3 intimation under Rule 56A, despite receipt and use of the duty-paid imported raw material and subsequent payment of countervailing duty.

Analysis: The credit claim was rejected only on the ground of non-furnishing of D-3 intimation. The relevant material had been received in the factory, the consignment was accounted for, and the subsequent countervailing duty was paid after a less-charge demand. The purpose of prior notice was to enable verification at the time of receipt, but the factual receipt and use of the goods were not in dispute. The procedural requirement was treated as subordinate to the substantive entitlement where the duty-paid character and consumption of the material were otherwise established. The later amendment to Rule 56A also reinforced that procedural non-compliance was not invariably fatal.

Conclusion: The denial of proforma credit solely for want of prior D-3 intimation was not justified, and the assessee was entitled to the credit.

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