Credit of Additional Duties of Excise could be used against basic excise duty after the Rule 57F(12) proviso

The proviso inserted in Rule 57F(12) permitted credit of specified duty on inputs to be used towards payment of excise duty on final products, subject to the inputs having been received and used in the factory on or after 01-03-1997. For the relevant period, that proviso was treated as overriding the earlier restriction in Notification No. 5/94-C.E. (N.T.) dated 01-03-1994. On that basis, credit of Additional Duties of Excise was available for payment of basic excise duty, and the benefit was held to apply in favour of the assessee.

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Issues: Whether credit of Additional Duties of Excise could be utilised towards payment of basic excise duty in view of Notification No. 5/94-C.E. (N.T.) dated 01-03-1994 and the proviso inserted in Rule 57F(12) of the Central Excise Rules, 1944.

Analysis: The reference turned on the effect of the proviso inserted in Rule 57F(12), which permitted credit of specified duty on inputs to be utilised towards payment of duty of excise on any final product, subject to the statutory condition that the inputs had been received and used in the factory on or after 01-03-1997. The earlier restriction under the notification was held to stand overridden by the proviso for the relevant period. Since the period involved in the case was after the insertion of the proviso, the assessee was entitled to the benefit of that provision.

Conclusion: Credit of Additional Duties of Excise could be utilised towards payment of basic excise duty for the period in question, and the answer was in favour of the assessee.

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