using the rotary encoder as an input device

When posting a question, please be specific. It makes a difference whether you:

1) create a code to handle raw input digital lines directly in your f/w. In literature, they typically referred to as lines #A, #B

or

2) you use a quadrature detector chip, like LS7084 which takes those #A, #B as an input and produces cleaned-up clock & direction signals which also must be handled as digital lines but in a different way ;-). The hint is: on C167 family you can map CLK/UP signals to the timer's TxIN & TxEUD inputs. BTW, there is solution based on using PCF8574, bus expander - see ref. b) below

or

3) you are going to use processed output from a specialized controller

Good start for you would be:
a) google & learn
b) www.circellar.com/.../2303017.pdf

-- Nikolay.

When posting a question, please be specific. It makes a difference whether you:

1) create a code to handle raw input digital lines directly in your f/w. In literature, they typically referred to as lines #A, #B

or

2) you use a quadrature detector chip, like LS7084 which takes those #A, #B as an input and produces cleaned-up clock & direction signals which also must be handled as digital lines but in a different way ;-). The hint is: on C167 family you can map CLK/UP signals to the timer's TxIN & TxEUD inputs. BTW, there is solution based on using PCF8574, bus expander - see ref. b) below

or

3) you are going to use processed output from a specialized controller

Good start for you would be:
a) google & learn
b) www.circellar.com/.../2303017.pdf

-- Nikolay.