Special Modvat credit regime under Rule 57B excludes Rule 57A's 10% ad valorem limitation for furnace oil inputs.

Modvat credit on furnace oil under Rule 57B was not subject to the 10% ad valorem restriction in Notification No. 5/94-C.E. (N.T.) issued under Rule 57A, because Rule 57B operated as a separate credit regime with a non obstante clause. The limitation attached to Rule 57A could not be imported into Rule 57B unless expressly extended by the statute or notification. The later notification specific to Rule 57B supported that independent treatment, and reliance on Section 112 of the Finance Act, 2000 was treated as inapplicable to furnace oil.

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Issues: Whether Modvat credit on furnace oil used as input under Rule 57B of the erstwhile Central Excise Rules was restricted by the 10% ad valorem limitation in Notification No. 5/94-C.E. (N.T.) issued under Rule 57A.

Analysis: Rule 57B dealt with specified goods by providing a distinct regime from Rule 57A and began with a non obstante clause. The restriction contained in the notification issued under Rule 57A could not be read into Rule 57B merely because the latter referred to specified duty. The separate notification issued later for Rule 57B also indicated that the credit regime under Rule 57B was independently governed. The contrary reliance on Section 112 of the Finance Act, 2000 was held inapplicable to furnace oil.

Conclusion: The restriction of 10% ad valorem did not apply to furnace oil under Rule 57B, and the assessee was entitled to the Modvat credit claimed.

Ratio Decidendi: Where a special credit provision operates under a non obstante clause, a limitation attached to a different rule cannot be imported into it unless the statute or notification expressly applies that limitation to the special provision.

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