Deemed credit for re-rollers survived crossing the exemption slab under Notification No. 1/93-C.E., preserving eligibility.

A re-roller availing Notification No. 1/93-C.E. could continue to claim deemed credit under the Ministry's Order dated 01.03.1994 even after clearances crossed the Rs. 75 lakhs slab. The Rs. 75 lakhs limit was treated as regulating the extent of exemption, not as removing the unit from the class of manufacturers covered by the notification. The deemed credit order was therefore not curtailed by a trade note or by the contrary larger-bench view, and the manufacturer remained eligible for credit on inputs lying in stock on or after 01.04.1994.

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Issues: Whether a re-roller who continued to avail exemption under Notification No. 1/93-C.E. dated 28.02.1993 was entitled to deemed credit under the Ministry's Order dated 01.03.1994 after the value of clearances crossed Rs. 75 lakhs.

Analysis: Notification No. 1/93-C.E. granted exemption by slabs up to an aggregate value of clearances of Rs. 75 lakhs, subject to the condition that the manufacturer's preceding year clearances did not exceed Rs. 2 crores. The deemed credit order, however, extended credit to re-rollers availing the said notification in respect of inputs lying in stock on or after 01.04.1994. The decisive question was whether crossing the Rs. 75 lakhs slab discontinued the benefit of the notification itself. The Court accepted the view that the Rs. 75 lakhs limit only regulated the extent of concession and did not take the manufacturer out of the class of units availing the notification. It further held that the deemed credit order could not be restricted by a trade note or by the larger bench view that treated such units as ineligible once the slab was crossed.

Conclusion: The appellant remained entitled to deemed credit under the Ministry's Order dated 01.03.1994 while availing Notification No. 1/93-C.E., and the Tribunal's contrary view was unsustainable.

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