Concessional excise notification benefit survives where credit was not taken on inputs used for the relevant final product.

A concessional excise notification for dyed textured yarn was held available where no Modvat credit had been taken on the duty-paid textured yarn used in that specific final product. Credit taken on filament yarn used for a different final product did not, by itself, defeat the notification benefit for dyed textured yarn. The proviso to Rule 57F(12) was also read as permitting credit utilisation for duty payment on another final product where the stated conditions were met. On that basis, the duty demand was found unsustainable and the Revenue's challenge failed.

---

---

Issues: Whether the respondents were entitled to the concessional benefit under Notification No. 5/98-C.E. dated 2-6-98 for dyed textured yarn, notwithstanding that they had availed Modvat credit on filament yarn used in the manufacture of a different final product, while no credit had been taken on the textured yarn used in the manufacture of the dyed textured yarn.

Analysis: The benefit of the notification was denied only if credit on the inputs used in the relevant final product had been availed under Rule 57A, Rule 57B or Rule 57Q. The record showed that the respondents had not taken Modvat credit on the duty-paid textured yarn used as input for dyed textured yarn. The availability of credit on filament yarn used for another product did not by itself disentitle them from the notification benefit for the dyed textured yarn. The proviso to Rule 57F(12) also permitted utilization of credit in the manner indicated by the Tribunal for payment of duty on another final product where the conditions were satisfied.

Conclusion: The respondents were entitled to the concessional benefit under Notification No. 5/98-C.E. dated 2-6-98, and the duty demand was not sustainable.

Final Conclusion: The Revenue's challenge failed, and the order dropping the duty demand was upheld.

Ratio Decidendi: Where the credit on the inputs used for a particular final product has not been availed, the assessee cannot be denied a concessional notification benefit for that product merely because Modvat credit was taken on inputs used in the manufacture of a different final product.

---