Deemed credit under excise notification applied differently to existing stock, job work clearances, and post-change factory clearances.

Notification No. 29/96-C.E. (N.T.) governed deemed credit by different treatment for distinct clearance categories. Stock lying on 02.06.1998 remained eligible for the rate prescribed in Para 7A(b)(ii), and the revised definition of composite mills did not justify denial of the higher deemed credit on such existing stock. Goods cleared on job work basis fell under Para 5(iii) and attracted a restricted credit rate. Goods manufactured and cleared from the factory after 02.06.1998 were entitled to credit on an actual basis under the modified notification structure.

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Issues: Whether the appellants were entitled, under Notification No. 29/96-C.E. (N.T.) dated 03.09.1996, to deemed credit at different rates for stock lying on 02.06.1998, goods cleared on job work basis, and goods manufactured and cleared from their factory after 02.06.1998.

Analysis: The applicable notification prescribed a deemed credit regime with separate treatment for different categories of clearances. For stock lying on 02.06.1998, the prescribed rate under Para 7A(b)(ii) applied, and the change in the definition of composite mills did not justify denial of the higher rate on such existing stock. For goods cleared on job work basis, Para 5(iii) governed the entitlement and restricted the credit rate. For goods manufactured and cleared from the factory after 02.06.1998, the modified structure of the notification entitled the appellants to credit on actual basis.

Conclusion: The appellants were entitled to 60% deemed credit on stock lying as on 02.06.1998, 50% deemed credit on job work clearances, and actual basis credit on goods manufactured and cleared after 02.06.1998. The revenue's restriction was rejected to that extent.

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