ORDER
Gowri Shankar, Member (T)
1. The appellant was engaged in the manufacture of textured polyester yarn. The benefit of the exemption contained in notification 1/93 which was earlier not applicable to such yarn was extended to it with effect from 25th April, 1994 onwards by issue of notification 90/94 which amended notification 1/93. Textured yarn was not included in the notification issued under Rule 57A until 20th May, 1994. Until this date, it figured in a notification issued under Rule 56A. The appellant therefore availed of the proforma credit facility provided in Rule 56A until 20th May, 1994. The appellant indicated its intention to avail of notification 1/93 sometime on 16th May, 1994. Notification 1/93 provides for two possible rates of duty applicable to first clearance up to an aggregate value not exceeding Rs. 30 lakhs. Sub-clause (i) of Clause (a) of the notification provides that where a manufacturer avails of modvat credit, the effective duty on the goods will be equivalent to 10% ad valorem. Clause (ii) provides that in any other case, the goods will be exempted from the whole of the duty. The appellant availed of the exemption contained in Sub-clause (i) of Clause (a) on its understanding that since it is availing of proforma credit, it would be covered by this clause. The notice issued to the appellant proposed to deny the exemption on the clearance made between 25th May and 30th May, 1994 on the ground that it was not availing of modvat credit under Rule 56A and that the proforma credit that it availed of was under different rule and not to be equated to modvat credit. It made applicable to the goods the duty payable at the tariff rate i.e. the duty payable but for the exemption. The Assistant Commissioner, whose order has been confirmed by the Commissioner (Appeals), confirmed the proposal in the notice. Hence this appeal.
2. The contention of the counsel for the appellant is that there is in effect no difference between modvat credit available under Rule 57A, and the appellant therefore correctly availed of the exemption contained in Clause (a)(i). He contends alternatively that it is held that the exemption contained in Clause (a)(i) is not available. The exemption contained in Sub-clause (ii) of Clause (a) would be available in which case, no duty in addition of what has been paid is now available. The departmental representative contends that proforma credit and modvat credit are different and one cannot be equated with the other. As to the alternative contention of the appellant, he points out that it is now being raised for the first time and was raised before the adjudicating authority or the Commissioner (Appeals).
3. We do not consider it necessary to examine the contention of the appellant that there is no difference between modvat credit and proforma credit. On the assumption that these are different and the appellant was therefore not entitled to exemption contained in Clause (a)(i), it would follow that it would be entitled to the exemption contained in Clause (a)(ii). This clause provides that “in any other case,” i.e. a case other than that covered by Sub-clause (i) the goods are exempted from the whole of the duty. If, therefore, the appellant was not entitled to the exemption contained in Sub-clause (i), it would be entitled to exemption contained in Sub-clause (ii). This is in fact what the Assistant Commissioner himself says in his order, “I find that only manufacturers clearing their final product under Modvat scheme are allowed the benefit of concessional rate of duty and in respect of manufacturers and clearing their final product under Rule 57A, there is a specific scheme of clearing goods under SSI scheme without payment of duty under Clause a(ii) of SSI Notification No. 1/93.” It is a different matter that he has not gone on logically to hold that there has been no short levy of duty. The fact that this point was not raised before the Assistant Commissioner or Commissioner (Appeals) does not preclude the appellant from raising it before this Tribunal, particularly since it is a question of law. It would therefore follow that there was no short payment of duty by the appellant.
4. Appeal allowed. Impugned order set aside.