Proforma credit under Rule 56A cannot be curtailed by the destination of cleared wire rods after manufacture.

Proforma credit under Rule 56A of the Central Excise Rules, 1944 cannot be restricted by the later destination of cleared wire rods. Where duty-paid billets are used to manufacture dutiable wire rods, the statutory conditions for proforma credit are satisfied, and the Department cannot control whether the goods are sent to the assessee's own unit or to outside buyers after clearance. Notification No. 95/83-C.E. applied to wire ropes and had no bearing on a unit manufacturing only wire rods. Notification No. 208/83-C.E. could not be relied on to deny credit where the Rule 56A requirements were otherwise met.

---

---

Issues: Whether proforma credit under Rule 56A of the Central Excise Rules, 1944 could be restricted only to wire rods cleared to the assessee's own wire-rope unit and whether Notification No. 95/83-C.E. dated 01-03-1983 had any bearing on the assessee's entitlement.

Analysis: Rule 56A concerns the clearance of dutiable final products from the factory where the procedure is availed of, and does not authorise the Department to control the subsequent destination or end-use of those goods after clearance. Once duty-paid billets were used to manufacture wire rods and the wire rods were dutiable, the assessee satisfied the conditions for availing proforma credit. The fact that the wire rods might be sent either to the assessee's own unit or to other buyers was not a valid ground to curtail the benefit. Notification No. 95/83-C.E. related to wire ropes and had no application to the assessee's Jamshedpur unit, which manufactured only wire rods and had not sought benefit under that notification. Notification No. 208/83-C.E. could not be used to deny Rule 56A credit where the statutory conditions for such credit were otherwise met.

Conclusion: The restriction imposed on the assessee's Rule 56A benefit was unsustainable, and the assessee was entitled to proforma credit on wire rods without restriction as to the destination of clearances.

Final Conclusion: The appeal succeeded, the impugned appellate order was set aside, and the assessee's request for Rule 56A benefit was allowed in full.

Ratio Decidendi: Proforma credit under Rule 56A cannot be limited by the eventual destination of the cleared goods once the statutory conditions for duty-paid inputs and dutiable final products are satisfied.

---