Exemption under Notification No. 75/87 survives prior duty payment on the first slab of clearances.

Payment of duty on the first slab of clearances did not, by itself, forfeit eligibility for the concessional benefit under Notification No. 75/87 for later clearances. The text states that goods were cleared on full duty up to the first slab while the classification list was pending approval, and the next slab was then cleared at the concessional rate. The objection that earlier duty payment disentitled the assessee from the notification was rejected because exemption could not be denied solely on that basis, and the conduct did not amount to non-compliance warranting tariff rate on all clearances.

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Issues: Whether payment of duty on the first slab of clearances and availment of Modvat credit disentitled the assessee from claiming the benefit of Notification No. 75/87 for the subsequent slab of clearances.

Analysis: The assessee had cleared the goods on payment of full duty for the first clearances up to Rs. 5,00,000/- while the classification list was pending approval, and thereafter cleared the next slab at the concessional rate. The denial of the notification benefit was held untenable because the mere fact that duty had been paid on the first slab did not forfeit the exemption available for the later slab. The reasoning followed the principle that an exemption cannot be refused solely because duty was already paid, and the assessee's conduct did not amount to non-compliance with the notification so as to attract tariff rate on the entire clearances.

Conclusion: The assessee was entitled to the benefit of Notification No. 75/87 for the subsequent clearances, and the objection based on payment of duty on the first slab was rejected.

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