Special excise duty credit on inputs remained usable, including duty paid later through supplementary bills for price escalation.

Rule 57F(8) permitted credit of special excise duty on inputs duty-paid on or before 28-2-1993 to be used for duty on final products cleared after that date and before 31-3-1994. Where the inputs had in fact suffered special excise duty under the Finance Act, 1992, the credit remained available for utilisation as claimed. Special excise duty paid later through supplementary bills for input price escalation was also treated as relating back to the original duty-paid clearances, so the benefit was not denied.

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Issues: Whether credit of special excise duty paid on inputs received after 28-2-1993 could be utilised for payment of basic excise duty on final products cleared during the relevant period, and whether special excise duty paid on account of subsequent price escalation through supplementary bills remained eligible for such credit.

Analysis: Rule 57F(8) permitted utilisation of credit of special excise duty paid on inputs on or prior to 28-2-1993 towards duty on final products cleared after that date and before 31-3-1994. The notice itself accepted that the inputs had suffered special excise duty under the Finance Act, 1992. On that basis, the credit was available for utilisation in the manner claimed. As to the supplementary bills, duty paid later because of escalation in input value related back to the original clearances of inputs prior to 28-2-1993, and no reason was found to deny the benefit.

Conclusion: The respondents were entitled to utilise the special excise duty credit, including in respect of duty paid on price escalation through supplementary bills.

Final Conclusion: The Revenue's challenge failed and the order allowing the respondents' credit entitlement was sustained.

Ratio Decidendi: Credit of special excise duty on inputs already suffered duty before the exemption date remains utilisable under Rule 57F(8) for eligible final products, and duty paid later on account of input price escalation relates back to the original duty-paid clearances.

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