Special excise credit for fuel inputs overrides the general limit, while Rule 57A credit remains capped by notification.

Rule 57B provided a special credit entitlement for goods used as fuel and operated notwithstanding Rule 57A, so the 10% ad valorem restriction in the 1 March 1994 notification did not apply to furnace oil credit under Rule 57B for the relevant period before 1 June 1998; credit was allowable to the extent of duty actually paid, subject to the later amended regime. By contrast, Rule 57A credit remained expressly confined by the 10% ad valorem limit in the notification as amended on 3 May 1997, and the later explanation only clarified the meaning of inputs without expanding the credit quantum. The result was partial relief, with the Rule 57A restriction upheld.

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Issues: (i) Whether, under Rule 57B of the Central Excise Rules, 1944, credit on furnace oil used as fuel was restricted by the 10% ad valorem limit contained in the notification dated 1 March 1994; (ii) Whether, under Rule 57A of the Central Excise Rules, 1944, credit on inputs remained confined to 10% ad valorem.

Issue (i): Whether, under Rule 57B of the Central Excise Rules, 1944, credit on furnace oil used as fuel was restricted by the 10% ad valorem limit contained in the notification dated 1 March 1994.

Analysis: Rule 57B created a separate and special entitlement for specified categories of goods, including goods used as fuel, and operated notwithstanding Rule 57A. The restriction in the 1994 notification was treated as part of the specification of duties under Rule 57A, but not as part of the definition of "specified duty" for Rule 57B. The non-obstante language would be rendered ineffective if Rule 57B credit were subjected to the same restriction applicable under Rule 57A. Where the Government intended to restrict Rule 57B credit, it did so by an express amending notification.

Conclusion: The 10% ad valorem restriction did not apply to credit claimed under Rule 57B for the relevant period prior to 1 June 1998, and the assessee was entitled to credit to the extent of duty actually paid, subject to the later amended regime.

Issue (ii): Whether, under Rule 57A of the Central Excise Rules, 1944, credit on inputs remained confined to 10% ad valorem.

Analysis: The notification dated 1 March 1994, as amended on 3 May 1997, expressly restricted Rule 57A credit on specified inputs to 10% ad valorem. The later explanation did not alter that restriction, as it only clarified the meaning of "inputs" and did not expand the quantum of permissible credit.

Conclusion: The 10% ad valorem restriction under Rule 57A was valid and applicable, and the assessee's challenge to that extent failed.

Final Conclusion: The assessees succeeded on the Rule 57B credit issue for the relevant period, but the restriction under Rule 57A was upheld, resulting in partial relief only.

Ratio Decidendi: A special credit provision operating notwithstanding the general provision cannot be cut down by a restriction attached to the general provision unless the limitation is expressly extended to the special provision by clear notification or amendment.

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