Judgment:
1. The appellants herein were availing of proforma credit under Rule 56-A prior to 1.3.1986 and they had opted for operating under modvat credit scheme after 1.3.1986 under Rule 57A of the Central Excise Rules. Differential duty was paid by the supplier of the input and the appellants wanted to take credit of the differential duty which was not allowed by the lower authority who held that Sub-rule (9) under Rule 56A was against such grant of credit. This Rule laid down that nothing contained in the Rules relating to proforma credit shall apply to the manufacturer availing Modvat credit under Rule 57A. The orders of the Assistant Commissioner were upheld by the Commissioner (Appeals) leading to the present appeal.
2. We have heard Shri Willingdon Christian, the Id. counsel for the appellants and Shri Gurdeep Singh, the Id. DR for the respondent. The matter is no more res Integra. It is covered by the decision in the case of Hematic Motors (P) Ltd. v. Collector of Central Excise, Pune 1990 (16) ETR 246 : 1991 (35) ECR 263 (T). In that case the Tribunal held that if the credit for differential duty cannot be granted under the modvat rules relating to proforma credit, such differential duty can still be granted as credit by allowing it to be taken in PLA of the assessee concerned. The Tribunal therefore, directed the lower authorities to allow the assessee to take credit of differential duty in PLA and correspondingly make the debit in RG 23A Modvat Account to the same extent. This order of the Tribunal had been followed in another decision of the Tribunal in the case of Rajasthan Explosives and Chemicals Ltd. v. Collector of Central Excise .
Applying the ratio of the above decisions to the facts of the present case, we set aside the impugned order and allow the appeal.