Exemption under Notification No. 56/2002-C.E. applied for the full month once eligibility existed during December 2006.

Notification No. 56/2002-C.E. was interpreted to allow exemption for an existing unit that had already completed substantial expansion and satisfied the employment condition before December 2006. Because duty on monthly clearances was payable in the following month, and the scheme required first adjustment of available Cenvat credit with cash payment only of the balance, the exemption could not be confined to clearances made after 11-12-2006. The benefit therefore applied for the entire month of December 2006, and the Revenue's challenge failed.

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Issues: Whether the benefit of Notification No. 56/2002-C.E. for the month of December 2006 could be restricted only to clearances made from 11-12-2006, when the assessee became eligible for exemption during that month.

Analysis: The notification extended exemption to existing units that had undertaken substantial expansion resulting in the required increase in regular employment. The assessee had satisfied the eligibility condition prior to December 2006. Duty on clearances made in a month was payable in the next month, and where all goods manufactured in the specified area were eligible for exemption, the scheme required first utilization of available Cenvat credit at the end of the month and payment of only the balance in cash, which was then refundable. Since the assessee was eligible during December 2006 itself, and the duty for that month was payable only in the subsequent month, the exemption could not be confined to clearances made after 11-12-2006.

Conclusion: The exemption was available for the whole of December 2006, not merely from 11-12-2006, and the Revenue's appeal failed.

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