Deemed credit on processed fabrics denied where further processing followed, as the notification's exclusion applied.

Deemed credit under Notification No. 29/96-C.E. (N.T.) was unavailable where processed fabrics received from job workers were used again as input for further processing before final clearance. Explanation II was applied to exclude processed fabrics that themselves become inputs for further processing, so the statutory condition for availing deemed credit was not met. Denial of the credit was therefore lawful.

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Issues: Whether deemed credit under Notification No. 29/96-C.E. (N.T.) was admissible where processed fabrics received from job workers were used again as input for further processing before final clearance.

Analysis: The notification was read with its Explanation II, which expressly excludes cases where processed fabrics themselves are used as input for further processing. Since the appellants received processed fabrics back from job workers and subjected them to further processing before final clearance, the condition for availing deemed credit was not satisfied.

Conclusion: The benefit of Notification No. 29/96-C.E. (N.T.) was not available, and denial of deemed credit was lawful.

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