Deemed credit under an expired notification cannot be claimed for clearances made after its operative period ends.

Deemed credit under Notification No. 6/2002-C.E. (N.T.) was held unavailable where final products were cleared after the notification had expired, even though inputs and stock were in existence before expiry. The operative benefit was tied to the time of clearance, so the manufacturer could not claim credit merely because the goods were received or held before 31.03.2003. The merits finding was set aside. On limitation, the plea had been raised but not examined, and the matter was remanded for a fresh decision on that issue after hearing both sides.

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Issues: (i) Whether deemed credit under Notification No. 6/2002-C.E. (N.T.) dated 01.03.2002 could be availed when the final products were cleared after the notification had ceased to operate, though the inputs and stock existed before 31.03.2003; (ii) whether the question of limitation required consideration.

Issue (i): Whether deemed credit under Notification No. 6/2002-C.E. (N.T.) dated 01.03.2002 could be availed when the final products were cleared after the notification had ceased to operate, though the inputs and stock existed before 31.03.2003.

Analysis: The notification provided that credit of the declared duty deemed to have been paid would be allowed to the manufacturer of the final products at the time of clearance of those final products. The final products were admittedly cleared only in April 2003, by which time the notification had already come to an end on 31.03.2003. Since the benefit was to operate at the time of clearance, and the notification was no longer in force on that date, the credit could not be claimed merely because the inputs had been received or the goods were in stock before expiry of the notification.

Conclusion: The respondent was not entitled to the deemed credit and the order of the Commissioner (Appeals) on merits was set aside.

Issue (ii): Whether the question of limitation required consideration.

Analysis: The limitation plea had been raised before the Commissioner (Appeals), but it was not examined because the appeal was allowed on merits. As the availment of credit had been reflected in the ER-1 returns and the show cause notice was issued later, the issue required adjudication on a full hearing of both sides.

Conclusion: The matter was remanded to the Commissioner (Appeals) for a decision on limitation.

Final Conclusion: The appeal succeeded on the substantive credit issue, but the dispute was sent back for a limited determination on limitation.

Ratio Decidendi: A concession under a notification can be availed only while the notification remains operative and in the manner and at the stage specified by the notification; once the notification expires, the benefit cannot be claimed for clearances made thereafter solely because the inputs or stock predated its expiry.

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