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Issues: (i) Whether re-rollers who had crossed the aggregate clearance value of Rs. 75,00,000/- under Notification No. 1/93-CE were still entitled to deemed credit under Order No. TS/36/94-TRU dated 1 March 1994; (ii) Whether deemed credit could be availed after the deemed credit order had been rescinded with effect from 1 April 1995.
Issue (i): Whether re-rollers who had crossed the aggregate clearance value of Rs. 75,00,000/- under Notification No. 1/93-CE were still entitled to deemed credit under Order No. TS/36/94-TRU dated 1 March 1994.
Analysis: The benefit under the deemed credit order was granted to re-rollers availing the exemption under Notification No. 1/93-CE. The clearance limit of Rs. 75,00,000/- in that notification regulated the extent of exemption available under the notification, but it did not form the eligibility criterion for the class of manufacturers covered by the notification. The order under Rule 57G(2) operated on the basis that the manufacturer fell within the notification and did not confine deemed credit to clearances up to Rs. 75,00,000/-. The contrary view treated the slab limit as a restriction on the deemed credit order itself, which was not supported by the language of the order or the notification.
Conclusion: The benefit of deemed credit was available even after the clearance value crossed Rs. 75,00,000/-, and the issue was answered in favour of the assessee and against the revenue.
Issue (ii): Whether deemed credit could be availed after the deemed credit order had been rescinded with effect from 1 April 1995.
Analysis: The deemed credit order stood rescinded with effect from 1 April 1995. Any availment of credit after that date could not be justified under a rescinded order. To that extent, credit taken after rescission was not admissible, and the Tribunal was required to examine that aspect specifically.
Conclusion: Deemed credit was not admissible for the period after rescission of the order, and the issue was answered in favour of the revenue and against the assessee.
Final Conclusion: The judgment upheld the assessee's entitlement to deemed credit notwithstanding crossing of the Rs. 75,00,000/- clearance limit, but denied benefit for credit taken after the order had ceased to operate.
Ratio Decidendi: A slab limit in an exemption notification that governs the extent of exemption does not, by itself, curtail a separately issued deemed credit order applicable to manufacturers falling within the notification; however, no credit can be claimed once the enabling order has been rescinded.
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