Proforma credit under Rule 56A was unavailable where inputs and finished goods fell under different tariff items without specific sanction.

Rule 56A of the Central Excise Rules, 1944 allowed proforma credit only where the finished goods were notified and the rule's provisos were satisfied. The provisos required the inputs to be duty-paid under the same tariff item or sub-item as the finished goods, unless the Central Government had specifically sanctioned remission or adjustment of duty. Reading the rule and provisos together, the Court held that the main provision could not override this express limitation. Proforma credit was therefore unavailable where the inputs and finished goods fell under different tariff items and no such sanction existed.

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Issues: Whether the benefit of proforma credit under Rule 56A of the Central Excise Rules, 1944 was available when the inputs and the finished excisable goods were assessable under different tariff items or sub-items.

Analysis: Rule 56A allowed proforma credit only when the finished goods were specified by notification and the conditions in the rule and its provisos were satisfied. The proviso required that the inputs must either be duty-paid under the same item or sub-item as the finished goods, or else the Central Government must have specifically sanctioned remission or adjustment of duty on those inputs. The language of the rule was held to be plain and the provisos were to be read conjointly, so the main part of the rule could not override the express limitation in the proviso.

Conclusion: The benefit of proforma credit was not available to the appellants because the inputs and finished products were classifiable under different tariff items and there was no specific governmental sanction for remission or adjustment. The denial of credit was upheld.

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