Simultaneous exemption and Modvat credit are permissible when claimed for different goods under different tariff headings.

An assessee may simultaneously claim exemption under Notification No. 175/86-C.E. for goods falling under one tariff heading and avail Modvat credit for goods falling under a different heading, because no express statutory prohibition bars that arrangement. The Tribunal rejected the view that simultaneous use of both benefits was impermissible merely because one assessee claimed exemption and credit under different headings. The arrangement was therefore held permissible on the facts considered, and the issue was decided in favour of the assessee.

---

---

Issues: Whether an assessee could simultaneously avail exemption under Notification No. 175/86-C.E. dated 01-03-1986 for goods falling under one heading and Modvat facility for goods falling under another heading.

Analysis: The Tribunal followed its earlier view that an assessee is not barred from claiming exemption for goods under one tariff heading while taking Modvat credit in respect of goods under a different heading. The impugned order had proceeded on the footing that such simultaneous availment was impermissible, but the Tribunal found no statutory prohibition against the arrangement when the two benefits relate to different goods under different headings.

Conclusion: The assessee's simultaneous availment of exemption and Modvat credit was held to be permissible, and the issue was decided in favour of the assessee.

Ratio Decidendi: In the absence of an express statutory bar, an assessee may simultaneously avail exemption for goods falling under one heading and Modvat credit for goods falling under another heading.

---