V.P. Gulati, Member (T)

1. This is an appeal filed against the order of C.C.E. Bombay. The brief facts of the case are that the appellants claimed the benefit of Notification No. 103/61, dated 20.4.1961 as amended. The amendment to this Notification No. 103/61 was made by Notification No. 109/80 by which the benefit of the exemption under this notification was made subject to the procedure under Rule 56A being followed. The procedure under Rule 56A was amended by Notification No. 104/79, dated 3.3.1979 and a proviso was added in Sub-rule (ii) as under:

"1 (Provided further that no credit of countervailing duty shall be allowed in respect of any material or component parts used in the manufacture of finished excisable goods, if countervailing duty has been paid in respect of such material, or component parts, as fall under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944)."

2. The appellants enjoyed the benefit of Notification No. 103/61 till 19.06.80 when by virtue of Notification 109/80 the procedure of set-off under Rule 56A was made applicable.

3. The lower authorities held that inasmuch as the benefit of the set-off in respect of C.V. Duty paid under Tariff Act 68 was not available in terms of proviso to Rule 56A introduced by virtue of Notification No. 104/79, the appellants were not eligible for the benefit of the said Notification No. 103/79 in respect of Item 68 products on which C.V. duty was paid and which were used by them for the manufacture of S.O. Dye stuffs as Intermediate goods. The Notification No. 103/61, for convenience of reference, as amended, is reproduced below:

"In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts synthetic organic dyestuffs manufactured wholly or partly out of the imported intermediates from the payment of so much of the duty of excise leviable thereon as is equivalent to the amount of countervailing customs duty paid on such imported intermediates."

"Provided that in relation to the exemption under this notification, the procedure set out in Rule 56A of the aforesaid rules is followed."

4. The learned Advocate for the appellants drew our attention to Rule 56A and pleaded that any restriction in regard to availment of the credit in respect of Tariff Item 68 goods on which C.V. Duty was paid, can only be restricted in case the appellants availed of the benefit of the exemption as a notified item under Rule 56A. He pleaded that the appellants have claimed the benefit of exemption under Notification No. 103/61 and not under Rule 56A. He pleaded that what was sought to be done by Notification 109/80, dated 19.6.1980 was that for the purpose of availing the benefit under Notification 103/61. the procedure as prescribed for availing the credit under Rule 56A was required to be followed. He pleaded that so far as benefit claimed under the Notification 103/61 was concerned, the same was being claimed in terms of this notification, and this benefit could not be denied under a notification issued in the context of Rule 56A. He pleaded that only the procedural part relating to the mode of the availing of the credit was made applicable by amending Notification No. 109/80 for availing the benefit of Notification No. 103/61 and not the substantive part of Rule 56A.

5. The learned S.D.R., for the department, generally adopted the reasoning given in the Order of Collector (Appeals)

Rule 56A Sub-rule (i) reads as under:

"Notwithstanding anything contained in these rules, the Central Government may be notification in the Official Gazette, specify the excisable goods in respect of which the procedure laid down in Sub-rule (2) shall apply."

It is seen that the procedure to be followed in terms of this rule for the purpose of getting benefit under Rule 56A has been set out in Sub-rule (2). By this sub-rule, an asses-see Is required first to obtain permission for availing of the proforma credit