S. R. RAJASEKHARA MURTHY, J.

( 1 ) THE petitionerm/s N. G. E. F. Ltd. a Government of Karnataka undertaking, has challenged the endorsement issued by the Asst. Collector, Central Excise, east Division, Bangalore, dated 18-7-1981 (Anx-E ).

( 2 ) THE petitioner-company manufactures essentially among other productselectrical motors. In the manufacture of electric motors, electrical stampings are used in the manufacture of die-cast-rotors which go in the manufacture of the end product, namely, electric motors.

( 3 ) THE petitioner was permitted to avail of the pro-forma credit under Rule 56a of the Central Excise Rules, 1944, (Rules) in respect of the electrical stampings used in the manufacture of electric motors. The petitioner-company itself used to manufacture die-cast- rotors which are necessary for the electric motors. it so happened that during 1981-82 it did not have the necessary capacitv to manufacture diecast-rotors sufficient for the manufacture of the required number of electrical motors. in these circumstances, the petitioner-company entered into a contract with M/s. Eltex Engineering corporation, Coimbatoie, for supplying the die-cast-rotors using electrical stampings supplied by the petitioner. For this purpose, the petitioner made an application in the prescribed form under rule 56a (7) of the Central Excise Rules to the Department. This application was rejected by the Asst. Collector, central Excise by his endorsement dated 18-7-1981 (Anx-E), which is reproduced below :"sub :ce -Rule 56aavailment for Electrical Stampingsreg. Please refer to your letter C/880/ 81-82 dated 15-4-81. Permission to avail proforma credit in respect of duty paid electrical stamping used in the manufacture of die cast rotors cannot be granted in as much as die cast rotors are fully exempt from duty and cannot be accounted as such in rg 23. Further it will not possible to correlate the stampings going out with the die cast rotors coming back in terms of weight, since aluminium is added at the processing factory".

( 4 ) THE grievance of the petitioner is that the electrical stampings which could not be utilised by it in the manufacture of die-cast-rotors to the extent of its requirement, had to be supplied to the Eltex Eng. Corporation, who, in turn manufactured the electrical die-cast rotors by using these stampings.

( 5 ) UNDER Rule 8 of the Rules, the central Government may, by notification, exempt any excisable goods from the whole or any part of duty leviable on such goods. A notification dated 1-3-1979, which was amended from time to time, was issued under the said Rules by the central Government which sets out the exemption in respect of the excisable goods which could be availed of under the Rules. Under the same notification it is provided that for the purpose of claiming exemption, the procedure set out in Rule 56a shall be followed. item No. 7, in the said notification is electric Stampings and laminations, all sorts. One of the conditions for claiming exemption under the said notification is that the inputs specified in Col. No. 3 of the table, annexed to the notification, should be used in the manufacture of final products specified in the corresponding entry in Col. No. 5. It can be seen from the table that electrical stampings under entry-7 form the component parts or the inputs specified in the manufacture of the final products, namely, electric motors. Rule 56a of the Rules, provides for the special procedure for movement of duty paid materials or component parts for use in the manufacture of finished excisable goods.

( 6 ) LEARNED Counsel for the petitioner has relied upon sub-rule (7) of Rule 56a of the Rules for the purpose of his case. The said sub-rule is reproduced below :" (7 ). A manufacturer may apply to the collector for removal of the material or component parts as such, or the material or component parts which have been partially processed during the course of manufacture of the excisable goods, to a place outsi

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