Exemption under Notification No. 1/93-C.E. not denied merely because Modvat credit was taken in another factory of same manufacturer.

Exemption under Notification No. 1/93-C.E. could not be denied for clearances from one factory merely because the same manufacturer availed Modvat credit in another distinct factory. The notification was read as allowing clearances from one or more factories for computing the value of clearances, and that wording did not prohibit exemption in one unit alongside credit availment in another. Applying the earlier Tribunal view relied on in the discussion, the existence of Modvat credit in the second unit did not affect eligibility for exemption in the first unit, and the assessee was entitled to succeed.

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Issues: Whether exemption under Notification No. 1/93-C.E. could be denied for goods manufactured in one factory merely because Modvat credit was availed in another factory of the same manufacturer.

Analysis: The assessee had two distinct units, one enjoying full exemption under the notification and the other availing Modvat credit. The notification was construed as permitting clearances from one or more factories for computing the value of clearances, and this wording did not bar a manufacturer from claiming exemption in one unit while taking Modvat credit in another. Following the earlier Tribunal view relied upon in the order, the existence of Modvat credit in the second unit was held not to make the assessee ineligible for exemption in the first unit.

Conclusion: The exemption could not be denied on the stated ground, and the assessee was entitled to succeed.

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