Higher notional credit for special excise duty was denied because the exemption notification did not extend to that levy.

Higher notional credit under Rule 57B read with Notification No. 175/86-C.E. was confined to the basic excise duty framework under Section 3 of the Central Excises and Salt Act, 1944. Because the notification was issued under Rule 8(1) and did not expressly extend to special excise duty levied under the Finance Act, 1988, its benefit could not be applied to that duty. The Tribunal view cited in the text was followed on the same construction, and the claim for higher notional credit on special excise duty was rejected.

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Issues: Whether higher notional credit of special excise duty was admissible under Rule 57B of the Central Excise Rules, 1944 read with Notification No. 175/86-C.E. dated 1-3-1986.

Analysis: The Notification was issued under Rule 8(1) of the Central Excise Rules, 1944 and operated in relation to basic excise duty under Section 3 of the Central Excises and Salt Act, 1944. It did not invoke the Finance Act, 1988 under which special excise duty was levied. On that construction, the benefit of higher notional credit provided in the notification could not be extended to special excise duty. The reasoning was consistent with the cited Tribunal view that the notification did not cover special excise duty.

Conclusion: Higher notional credit on special excise duty was not admissible, and the assessee's claim failed.

Ratio Decidendi: A notification issued under Rule 8(1) granting higher notional credit for duty-paid inputs cannot be extended to special excise duty unless the notification expressly brings that duty within its scope.

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