Concessional excise exemption beyond clearance ceiling denied; inadmissible credit upheld, but duplicate duty demand set aside.

Benefit of Notification No. 1/93 was held unavailable once the prescribed clearance ceiling was crossed, following the Tribunal's Larger Bench view, so the concessional exemption was denied. On that basis, credit taken under Rule 57-I was treated as inadmissible and the disallowance and recovery of credit were upheld. However, after the credit had been disallowed and recovered, no further duty liability could be fastened on the same basis under Section 11A, so the consequential duty demand was set aside.

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Issues: (i) Whether the appellants were entitled to the benefit of concessional rate of duty under Notification No. 1/93 after crossing the prescribed ceiling limit of clearances; (ii) whether disallowance of credit under Rule 57-I of the Central Excise Rules was sustainable; (iii) whether the consequential duty demand under Section 11A of the Central Excise Act, 1944 could survive.

Issue (i): Whether the appellants were entitled to the benefit of concessional rate of duty under Notification No. 1/93 after crossing the prescribed ceiling limit of clearances.

Analysis: The issue was treated as settled by the Tribunal's Larger Bench decision, which had already held that the benefit of the notification was not available once the prescribed clearance ceiling was crossed. The Tribunal therefore followed that view and declined to extend the concessional exemption beyond the stipulated limit.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether disallowance of credit under Rule 57-I of the Central Excise Rules was sustainable.

Analysis: On the footing that the benefit of the concessional scheme was not available after the ceiling limit was crossed, the credit taken by the appellants was held to be inadmissible and the order disallowing and recovering the credit was upheld.

Conclusion: The disallowance of credit was upheld against the assessee.

Issue (iii): Whether the consequential duty demand under Section 11A of the Central Excise Act, 1944 could survive.

Analysis: The Tribunal held that once the credit had been disallowed and recovered, no further duty liability could be fastened on the appellants on the same basis. The confirmed duty demand was therefore set aside.

Conclusion: The duty demand was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of the duty demand, while the disallowance of credit was sustained and the controversy on the concessional notification was resolved against the assessee.

Ratio Decidendi: When credit has already been disallowed and recovered, a further duty demand on the same basis cannot be sustained.

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