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Issues: Whether imported asbestos fibre, on which no excise duty was leviable, could qualify for proforma credit under Rule 56A of the Central Excise Rules, 1944 on the footing that additional duty was paid or recovered on import.
Analysis: The Tribunal applied the principle that additional duty on imports is only a countervailing levy and can be sustained only to the extent excise duty would be leviable on a like article if manufactured or produced in India. Since the imported asbestos fibre was not liable to excise duty on the footing of manufacture or production, no additional duty could validly be demanded on import and, if collected, it could not furnish a basis for credit under Rule 56A. The appellant's entitlement to proforma credit therefore failed because the statutory condition for such credit was not satisfied.
Conclusion: The claim for proforma credit was rejected and the appeal failed.
Final Conclusion: Imported asbestos fibre, not being subject to excise duty as a manufactured or produced article, could not support credit under Rule 56A, and the challenge to the denial of credit was unsuccessful.
Ratio Decidendi: Proforma credit on imported inputs is unavailable where the imported article is not liable to excise duty on the basis of manufacture or production in India, because additional duty is only the countervailing measure of the excise duty otherwise leviable on a like article.
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