Proforma credit under Rule 56A depends on same-tariff-item duty payment; broader entitlement was rejected.

Rule 56A proforma credit remained subject to the proviso to Rule 56A(2), and the non obstante wording in Rule 56A(1) did not dispense with the requirement that duty be paid on material falling under the same tariff item as the finished excisable goods. Because the raw materials and asbestos cement products were classified under different tariff items, the statutory condition for credit was not met and credit was held inadmissible. The alternative construction advanced for a broader entitlement from the date of application was rejected, as the proviso operated independently and imposed a mandatory eligibility condition.

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Issues: (i) Whether credit of duty under Rule 56A was admissible when the raw materials and the finished excisable goods fell under different tariff items. (ii) Whether the respondents were entitled to proforma credit from the date of application or only from the date of grant of permission, and whether their alternative construction of Rule 56A could be accepted.

Issue (i): Whether credit of duty under Rule 56A was admissible when the raw materials and the finished excisable goods fell under different tariff items.

Analysis: Rule 56A(1) and Rule 56A(2) had to be read together. The non obstante opening of Rule 56A(1) did not displace the conditions in the proviso to Rule 56A(2). The requirement that duty must have been paid on the material under the same item as the finished excisable goods continued to govern eligibility, even where the finished goods were specified in the notification under Rule 56A. Since the raw materials and the finished asbestos cement products were under different tariff items, the foundational condition for credit was not satisfied.

Conclusion: Credit under Rule 56A was not admissible, and the finding allowing credit was set aside in favour of Revenue.

Issue (ii): Whether the respondents were entitled to proforma credit from the date of application or only from the date of grant of permission, and whether their alternative construction of Rule 56A could be accepted.

Analysis: The respondents' alternative reading of Rule 56A, including the reliance on prior authority and the contention that the proviso operated only in limited situations, was rejected. The proviso to Rule 56A(2) was held to operate independently and to impose a mandatory condition of same-item duty payment. In view of the statutory scheme and the later judicial interpretation relied on by the Tribunal, the respondents' claim to a broader entitlement could not stand.

Conclusion: The respondents' cross-objection was rejected.

Final Conclusion: The departmental appeal succeeded and the cross-objection failed, with the Tribunal holding that proforma credit under Rule 56A was subject to the same-tariff-item condition and could not be claimed on the respondents' construction.

Ratio Decidendi: A notification under Rule 56A does not override the proviso to Rule 56A(2); eligibility for proforma credit remains conditional upon the prescribed statutory requirements, including payment of duty on the material under the same tariff item as the finished excisable goods.

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