Per K. Sankararaman:

These three appeals involving a common issue namely whether the benefit of exemption Notification 225/86 dated 3.4.86 could be availed of only at the time of clearance of the goods on payment of duty or the said benefit in terms of the amount of duty paid on the inputs used in their manufacture could be kept in an account for being utilised for payment of duty on final products manufactured subsequently using further lots of the same inputs. When the appeals were heard initially the Bench that heard the matter took note of the submissions of both the sides, particularly the reliance placed by the learned counsel for the appellants on the Tribunal decision in Indian Petro Chemicals Limited Vs. Collector of Central Excise reported in 1992 (61) ELT 138. That stand was opposed by the learned Senior Departmental Representative who contended that the Notification in question is different in its scope and terms from exemption Notification 201/79 which was the subject matter of the decision in Good Year India Limited by Delhi High Court which, it was contended, was wrongly followed by the Tribunal in the aforesaid decision. It was, therefore, pleaded by the learned Senior Departmental Representative before the Original Bench that the matter may be referred to a larger Bench for reconsideration of the said decision. Accepting that plea, the Bench had referred these appeals to this larger Bench, the point referred being - "whether IPCL decision of the Tribunal requires to be reconsidered or not."

2. Shri A.N. Haksar, learned Senior Counsel and Shri Sanjeev Grover, learned Advocate who had appeared for the appellants before the Original Bench argued the case of the appellants before us also. Shri Haksar submitted that the Tribunal decision in IPCL is good law and does not require to be changed. It had correctly followed the Delhi High Court judgement in the Good Year India Limited case and other similar Tribunal decisions. Shri Haksar also contested the submission of the learned Senior Departmental Representative during the earlier hearing which has been mentioned in the referring order that the wording of the subject set off Notification is identical with that in the pre-amended Rule 56A which, he urged, was wrong. He added that the subject Notification viz. 225/86 has not laid down any procedure as in. Notification 201/86. He reheated his submissions made in the earlier hearing before the Original Bench.

3. The arguments were opposed by Shri P.K. Jain, learned Senior Departmental Representative. He submitted that the IPCL case requires reconsideration. Reasons for such reconsideration have been cogently set out by the referring Bench, he stated. He pointed out that Notification 201/79 contains an important proviso viz. "provided that the procedure set out in the Appendix to this Notification is followed". Unlike this, Notification 225/86 does not have any such procedure. It is analogous, on the contrary, to Notification 178/77 which was the precursor to 201/79 and which was superseded by it. Notification No. 225/86 is only an exemption Notification. There are hundreds of exemption Notifications. There is no scheme for taking credit in such cases. There is no reason why Notification 225/86 which is also a simple exemption Notification without any built-in procedure of taking credit of duty should be treated differently. He concluded by pleading that the IPCL decision of the Tribunal may be reconsidered.

4. We have taken note of the submissions. We have gone through the record. We have carefully perused the order passed in the IPCL case. It was the contention of the department in that case that IPCL who were availing the benefit of the very same Notification 225/86-CE dated 3.4.86 which is under consideration in the instant appeals had not been maintaining the set off register and had not complied with the requirements of Trade Notice 126/81 issued by the collectorate. It was contended by the appellants therein that