Rule 56A proforma credit continued after exemption repeal, and the later notification did not exclude the benefit.

Rule 56A proforma credit remained available for stock and inputs after repeal of the earlier exemption notification, because the assessee could either continue under Rule 56A or pay duty at the notified rate. Notification No. 70/94-CE did not exclude that credit; its express reference to Rule 56A indicated that the option continued during its currency. The assessee's claim related to inputs received by it, and the Commissioner (Appeals) correctly relied on the Supreme Court basis noted in Formica India Division. The Tribunal upheld the allowance of Rule 56A benefit and rejected the appeal.

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Issues: Whether the respondent was entitled to claim the benefit of Rule 56A proforma credit in respect of stock lying at the time of repeal of the exemption notification, and whether Notification No. 70/94-CE excluded that benefit.

Analysis: The textured yarn had earlier been exempt under Notification No. 178/83-CE, and after repeal of that exemption the assessee remained at liberty to work under Rule 56A or to pay duty at the notified rate. Notification No. 70/94-CE expressly referred to Rule 56A, showing that the Rule 56A option continued to be available even during the currency of that notification. The assessee was only claiming the benefit of Rule 56A in relation to inputs received by it, and the Commissioner (Appeals) had rightly followed the earlier Supreme Court basis noted in Formica India Division.

Conclusion: The benefit of Rule 56A was available, and the Commissioner (Appeals) committed no error in allowing it. The appeal failed and was rejected.

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