Deemed credit cannot be denied merely because excise duty was paid after removal, absent any statutory prohibition.

Deemed credit was held to remain available where excise duty on cleared goods was paid subsequently rather than at the exact time of removal, because the duty liability had in fact been discharged. The Tribunal applied the principle that, absent any statutory prohibition, the timing of payment alone does not defeat the credit when the underlying duty payment is otherwise admissible. The analysis also noted that goods were initially cleared under the compounded levy regime and later duty was paid on an ad valorem basis after the mistake was realised. On that basis, denial of deemed credit solely for delayed payment was rejected.

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Issues: Whether deemed credit could be denied on clearances for which central excise duty was paid subsequently and not at the time of removal of the goods.

Analysis: The assessee had initially cleared the goods under the compounded levy regime and later paid duty on an ad valorem basis after realizing the mistake. The Tribunal held that there was no legal bar to availing deemed credit merely because the duty was not paid at the exact time of clearance, especially when the duty liability had in fact been discharged. Reliance was placed on the principle that deemed credit is available where the underlying duty payment is otherwise admissible and the timing of payment does not by itself defeat the benefit in the absence of any prohibition.

Conclusion: Deemed credit could not be denied merely because the duty was paid subsequently, and the issue was decided against the Revenue and in favour of the assessee.

Ratio Decidendi: In the absence of any statutory prohibition, deemed credit cannot be refused solely on the ground that duty on the cleared goods was paid after removal rather than at the time of clearance.

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