Simultaneous actual and deemed credit was permissible where the notification imposed no express bar on non-declared inputs.

The deemed credit notification was intended to offset duty on inputs used in processed fabrics where duty-paying documents were unavailable, and it barred deemed credit only when actual credit was taken on the declared inputs covered by the notification. Grey fabrics were not among those declared inputs, and the later amendment adding a bar for unprocessed fabrics confirmed that no such restriction existed for the period in dispute. In the absence of any express exclusion, actual CENVAT credit on grey fabrics received from 100% EOUs and deemed MODVAT credit under the notification could be availed simultaneously, so the Revenue's objection failed.

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Issues: Whether the assessee could simultaneously avail actual CENVAT credit on grey fabrics received from 100% EOUs and deemed MODVAT credit under the relevant notifications.

Analysis: The credit scheme under the notifications was intended to offset duty on inputs used in the manufacture of processed fabrics where duty-paying documents for the exempted stage were not available. The relevant notification barred deemed credit only where actual credit was taken in respect of the declared inputs covered by the notification. Grey fabrics were not among those declared inputs. The later amendment introducing a bar in respect of unprocessed fabrics showed that the earlier notification did not contain such a restriction for the period in dispute. In the absence of any express exclusion, actual credit on grey fabrics and deemed credit on the notified inputs could coexist.

Conclusion: The simultaneous availment of actual credit on grey fabrics and deemed MODVAT credit under the notification was permissible and the Revenue's objection failed.

Final Conclusion: The appeal of the Revenue was rejected and the Commissioner (Appeals) was upheld.

Ratio Decidendi: Where a notification granting deemed credit contains no express bar against actual credit on non-declared inputs, simultaneous availment of regular credit and deemed credit is permissible for the period governed by that notification.

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