Deemed credit under exemption notification continues beyond the initial clearance limit where binding precedent so permits.

A manufacturer availing exemption under Notification No. 1/93-C.E. could continue to claim deemed credit after clearances crossed Rs. 75 lakhs and up to Rs. 2 crores, because an earlier Division Bench ruling had already held that excess duty payment within the prescribed limits entitled the assessee to such benefit. The court followed that binding view and held that documentary production was not required as a condition for availing deemed credit. The reference was answered in favour of the assessee on the stated facts.

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Issues: Whether a manufacturer availing exemption under Notification No. 1/93-C.E. could continue to receive deemed credit benefit after the value of clearances crossed Rs. 75 lakhs and up to Rs. 2 crores.

Analysis: The question referred had already been considered in a prior Division Bench decision, which held that the manufacturer was entitled to claim the benefit of excess duty payment up to the prescribed limits and to avail deemed credit without production of documents. Following that view, the same answer was applied to the present reference.

Conclusion: The deemed credit benefit was available even after crossing the clearance value of Rs. 75 lakhs, and the question was answered in favour of the assessee.

Final Conclusion: The reference was decided by adopting the earlier binding view, thereby extending the deemed credit benefit to the assessee on the stated facts.

Ratio Decidendi: A manufacturer entitled to exemption under the relevant notification could avail deemed credit beyond the initial clearance limit where the governing precedent so allowed, without insisting on documentary production as a condition for such credit.

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