Modvat credit and exemption eligibility under Notification 14/92 turns on input credit status, not merely clearance date.

Exemption under entry 37 of Notification No. 14/92 depended on whether the finished goods were manufactured from inputs on which Modvat credit had not been availed, not merely on the date of removal. Where the appellant had begun taking Modvat credit only from 22-10-1993, and the relevant stock was shown to have been made from inputs on which credit had not been taken, the goods remained eligible for exemption. Objection based on the date of clearance was unsustainable, and the alleged failure to maintain separate accounts under the trade notice was also rejected because the appellant was not claiming simultaneous benefit of entries 37 and 38.

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Issues: Whether goods cleared after filing of classification lists were entitled to the exemption under Notification No. 14/92 where the goods had been manufactured from inputs on which Modvat credit had not been taken at the relevant time.

Analysis: The exemption under entry 37 remained available so long as the specified condition was satisfied. The determinative factor was not merely the date of removal, but whether the finished goods had been manufactured from inputs on which Modvat credit had not been availed of. The appellant had commenced availing Modvat credit only from 22-10-1993, and the stock covered by the declaration was shown to have been manufactured from inputs on which credit had not been taken. The Department's objection based on the date of removal was therefore unsustainable. The objection founded on alleged non-compliance with the trade notice regarding separate accounts was also not accepted, since the appellant was not seeking simultaneous benefit of both entries 37 and 38, but was claiming different treatment for goods manufactured before and after the change in its Modvat position.

Conclusion: The goods were eligible for exemption under entry 37 of Notification No. 14/92, and the denial of complete exemption was incorrect.

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