Rule 56A proforma credit denied where duty-paid inputs and finished goods fell under different tariff items.

Proper authorisation to file the appeal was upheld because the record showed the Collector had applied his mind and the note sheet supported valid sanction, so the preliminary objection failed. Proforma credit under Rule 56A was denied because the imported inputs had suffered countervailing duty under Tariff Item 68, while the finished tape recorders fell under Tariff Item 37AA; the proviso required correspondence between the duty-paid inputs and the finished excisable goods under the same tariff heading, which was not satisfied. The earlier finding on eligibility was set aside and the respondent was held ineligible for credit.

---

---

Issues: (i) Whether the authorisation for filing the appeal before the Tribunal was valid. (ii) Whether proforma credit under Rule 56A was admissible when countervailing duty had been paid on the imported inputs under a different tariff item from the finished goods.

Issue (i): Whether the authorisation for filing the appeal before the Tribunal was valid.

Analysis: The record showed that the Collector had applied his mind before directing the filing of the appeal. The note sheet was produced and supported the existence of proper authorisation.

Conclusion: The preliminary objection was rejected and the appeal was maintainable.

Issue (ii): Whether proforma credit under Rule 56A was admissible when countervailing duty had been paid on the imported inputs under a different tariff item from the finished goods.

Analysis: The imported goods were assessed to countervailing duty at 8% under Tariff Item 68, while the finished tape recorders attracted duty under Tariff Item 37AA. Under the proviso to Rule 56A(2) of the Central Excise Rules, credit was available only where duty had been paid on the inputs and the finished excisable goods under the same tariff heading. Since the tariff items differed, the condition for availing proforma credit was not satisfied.

Conclusion: Proforma credit was not admissible and the finding of eligibility was set aside.

Final Conclusion: The appeal succeeded and the respondent was held ineligible for proforma credit on the disputed imports.

Ratio Decidendi: Proforma credit under Rule 56A is not available where the duty-paid inputs and the finished excisable goods fall under different tariff items, because the statutory condition of correspondence between the duty-paid goods and the finished product is not met.

---