Cenvat credit does not lapse when clearances under a separate exemption notification are independently compliant.

Cenvat credit and clearances under Notification No. 10/2002 operated in separate fields, so accumulated credit did not lapse merely because the assessee cleared goods under that notification. The assessee had not taken credit on inputs used in the notified clearances, and the available credit related to inputs for other final products. As there was no breach of either scheme's conditions, the outstanding Cenvat credit remained valid after rescission of the notification, and the assessee was entitled to retain it; the Revenue's challenge failed.

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Issues: Whether the outstanding Cenvat credit standing in the assessee's books lapsed when clearances were made under Notification No. 10/2002, and whether such credit could be taken after the notification was rescinded.

Analysis: The Cenvat credit scheme and clearances under Notification No. 10/2002 operated in distinct fields. The assessee did not avail credit on inputs used in the goods cleared under the notification, and the available credit represented inputs meant for final products not covered by the notification. Since there was no violation of the conditions of either scheme, the outstanding credit could not be treated as having lapsed merely because clearances were made under the notification.

Conclusion: The outstanding Cenvat credit did not lapse and the assessee was entitled to retain the credit. The Revenue's challenge failed.

Ratio Decidendi: Where a notification restricting availment of credit and the Cenvat credit scheme are independently complied with, accumulated credit does not lapse merely because clearances are made under the notification.

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