Limitation for varied proforma credit recovery under Rule 56A turns on Rule 56A(5), not the general recovery provision.

Recovery of varied proforma credit under the proviso to Rule 56A(2) was treated as a matter governed by the limitation in Rule 56A(5), because Section 11A applies to duties not levied, short levied, short paid, or erroneously refunded and not to recovery of credit adjusted under Rule 56A. On that basis, the relevant period ran from the refund to the supplier, and the notice dated 11-7-1984 was issued within six months, so the demand was not time-barred. The contrary view held Section 11A applicable and the notice barred, but the majority rejected that approach.

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Issues: Whether the demand for reversal of proforma credit varied under the proviso to Rule 56A(2) was governed by the limitation under Section 11A of the Central Excises and Salt Act, 1944, or by the limitation contained in Rule 56A(5) of the Central Excise Rules, 1944, and whether the show cause notice dated 11-7-1984 was time-barred.

Analysis: The majority held that recovery arising from subsequent variation in duty paid on inputs under the proviso to Rule 56A(2) is not governed by Section 11A, because that provision applies to duties not levied, short levied, short paid, or erroneously refunded. The relevant limitation is found in Rule 56A(5), which contemplates recovery of credit allowed under Rule 56A and prescribes the applicable period. On the facts, the cause for recovery arose with the refund to the supplier, and the notice dated 11-7-1984 was issued within six months of that event. The precedent relied upon by the assessee was held not to control the present controversy.

Conclusion: The demand was not barred by limitation, and the Revenue's appeal succeeded.

Dissenting Opinion: K.S. Dilipsinhji held that Section 11A applied to recovery under the proviso to Rule 56A(2) and that the notice was time-barred. He would have dismissed the Revenue's appeal.

Final Conclusion: Recovery of varied proforma credit under the proviso to Rule 56A(2) was held to be governed by the limitation in Rule 56A(5), not Section 11A, and the impugned demand was upheld.

Ratio Decidendi: Where credit allowed under Rule 56A is varied because of a subsequent change in the duty on inputs, the recovery is controlled by the limitation prescribed in Rule 56A itself and not by the general recovery provision in Section 11A.

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