Valid service by affixation and no simultaneous Modvat credit where exemption conditions and clearance threshold were not met.

Service of a show cause notice by affixation was treated as valid where repeated personal service attempts failed and the prescribed procedure was followed; later supply of another copy at the assessee's request did not affect the date of service. The exemption under Notification No. 8/99-C.E. also barred simultaneous Modvat credit where the assessee had opted for the notification but had not crossed the prescribed clearance threshold. On those facts, the time-bar objection failed and the credit disallowance was sustained.

---

---

Issues: (i) Whether the show cause notice was duly served within limitation by affixation under the prescribed procedure; (ii) whether the assessee could avail Modvat credit while claiming the benefit of Notification No. 8/99-C.E. despite not crossing the prescribed clearance limit.

Issue (i): Whether the show cause notice was duly served within limitation by affixation under the prescribed procedure.

Analysis: The notice had been affixed to the factory gate after repeated attempts at personal service failed, and the record showed compliance with the prescribed mode of service. The later supply of an additional copy was only on the assessee's request and did not alter the fact that the assessee was already aware of the notice on the date of affixation.

Conclusion: The notice was duly served within limitation, and the finding of time bar recorded by the lower appellate authority was unsustainable.

Issue (ii): Whether the assessee could avail Modvat credit while claiming the benefit of Notification No. 8/99-C.E. despite not crossing the prescribed clearance limit.

Analysis: The exemption notification specifically prohibited availing credit of duty under Rule 57A unless the aggregate clearances exceeded the stated monetary threshold. Since the assessee had opted for the notification but had not crossed that limit, the condition attached to the exemption operated against simultaneous availment of Modvat credit.

Conclusion: The assessee was not entitled to Modvat credit, and the order of the adjudicating authority disallowing the credit and confirming the demand was correct.

Final Conclusion: The appeal succeeded, the order of the Commissioner (Appeals) was set aside, and the adjudication order was restored, resulting in confirmation of the demand and denial of relief to the assessee.

Ratio Decidendi: Where an exemption notification makes non-availment of Modvat credit a condition for the benefit, an assessee who opts for that notification cannot simultaneously claim the credit unless the notification's threshold condition is satisfied; service by affixation in accordance with the prescribed procedure is valid service.

---