Per K. Sankararaman - This Appeal by Collector of Central Excise, Patna is directed against Order-in-Appeal No. 19/BR/85 dated 1.3.85 passed by the Collector of Central Excise (Appeals), Calcutta holding that the Appellants before him, M/s Hyderabad Asbestos Cement Products (who are respondents before us in respect of the present Appeal filed by Collector, Patna) are entitled to the credit of duty paid on asbestos and cement used by them as raw materials in the manufacture of Asbestos Cement products.

2. In the Appeal, it has been contended by the Appellant Collector that the appellate order passed by Collector (Appeals) is against the explicit provisions of Rule 56A. Sub-Rule (2) there under and the proviso thereto would not permit the view taken by the Collector (Appeals), it has been contended. This provision specifically laid down that no credit shall be allowed unless duty had been paid for the material (used in the manufacture) under the same item as the finished excisable goods In the present case, this condition is not satisfied as the materials used, namely, cement and asbestos fall under Tariff Items different from that of the finished excisable goods, namely. Asbestos Cement Product. It has, therefore, been pleaded that the impugned Order-in-Appeal passed by the Collector (Appeals) be set aside and the Order-in-Original passed by the Assistant Collector denying them the benefit of Rule 56A restored.

3. The Respondents, M/s Hyderabad Asbestos Cement Products Ltd. have, for their part, filed a Cross Objection against the said Order-in-Appeal, challenging the finding therein to the effect that the benefit of Rule 56A would be available to them only from the date the permission was granted by the Assistant Collector. Both the Appeal and the Cross Objection had been transferred to Special Bench but later on retransferred to this Bench. The same are disposed of by us now.

4. The Appellant Collector was represented by Shri N.K. Mandal, learned Departmental Representative while the Respondents and the Cross Objectors M/s Hyderabad Asbestos Cement Products Ltd. were represented by Shri V. Morarka, learned Advocate. Shri Mandal reiterated the submissions contained in the Appeal and strongly pleaded that in view of the clear statutory provision, the Appeal may be allowed. Shri Morarka referred to their submissions in their Cross Objection.

5. We have carefully considered the submissions made by both the sides. We have perused the record. The impugned appellate order has been passed by the Collector (Appeals) partially accepting the plea made before him by the present Respondents. He has erred in holding that sub rule (ii) (sic) applies to products which are not notified by the Central Government in terms of sub-Rule (i) (sic) of Rule 56A. He has relied upon the expression "Notwithstanding anything contained in these Rules" with which sub-Rule (1) of Rule 56A of the Central Excise Rules starts for his conclusion. He has proceeded to observe that once excisable products is notified by the Central Government under Rule 56A, the restrictions given in the proviso to sub-Rule (2) are no longer applicable. He has attributed the denial of the Assistant Collector to grant the facility in respect of duty paid on the raw materials Cement and Asbestos in the manufacture of Asbestos Product to the latter's reading sub-Rule (1) and (2) together on the ground that the raw materials and the final product did not fall under the same Tariff item. He has observed that in view of the admitted fact that Asbestos Cement Products have been notified as one of the excisable goods in respect of which the products laid down in the sub-Rule (2) of Rule 56A will apply, figuring at Sl. No. 11 of the list in the Notification, the qualifying condition given in the proviso to Rule (2) was no longer applicable. Accordingly, he had held that the Respondents (herein) were entitled to the credit of duty paid on asbestos and cement used in the manufacture of Asbe