Jyoti Balasundaram, Member (J)

1. The appellants who are manufacturers of tyres tubes, receive synthetic rubber (T.I. 16AA) and carbon black (T.I. 64) to be used as inputs in the manufacture of finished excisable goods mainly tyres, tubes and flaps. The Appellants claimed that they were eligible for the benefit of exemption under Notification No. 95/79-C.E., dated 1-3-1979 as amended by Notification No. 58/82 dated 28-2-1982. These notifications provide for partial exemption in respect of duty leviable on finished goods to the extent of duty paid on goods used as inputs, provided the procedure set out in Rule 56A of the Central Excise Rules is followed. The appellants despatched Synthetic Rubber and Carbon Black to M/s. Madras Elastomers, where the goods were utilised in the manufacture of Rubber sheets falling under T.I. 16A(2) (These Rubber sheets were fully exempt from duty in terms of Notification 71/68-CE). The appellants expunged the credit of duty paid on synthetic rubber and carbon black which they had taken into account in respect of consignments sent to M/s. Madras Elastomers. Therefore they filed refund claim Rs. 1,65,859.10 being the duty paid on synthetic rubber