Retrospective clarification under proforma credit rules allowed credit for in-house produced raw petroleum coke.

An Explanation inserted by Notification No. 118/80-C.E. to Rule 56A(2) was treated as clarificatory because it only stated that materials or component parts manufactured in the producer's own factory were also covered under the proforma credit scheme. On that basis, it was held to operate retrospectively, so proforma credit could not be denied merely because the raw petroleum coke was produced in the manufacturer's own refinery and used in making calcined petroleum coke. The issue was resolved in favour of the assessee on the retrospective reach of the Explanation.

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Issues: Whether the Explanation inserted by Notification No. 118/80-C.E. dated 19-7-1980 to Rule 56A(2) of the Central Excise Rules, which included materials or component parts produced in the manufacturer's own factory, operated retrospectively so as to permit proforma credit on raw petroleum coke used in the manufacture of calcined petroleum coke.

Analysis: The Explanation was treated as clarificatory in nature. Since it merely explained that materials or component parts produced in the manufacturer's factory were also covered, it was held to operate retrospectively. The Tribunal relied on the earlier view that such an amendment did not create a new right but clarified the existing position under the proforma credit scheme.

Conclusion: The Explanation applied retrospectively, and proforma credit could not be denied on raw petroleum coke produced in the appellant's own refinery. The issue was decided in favour of the assessee.

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