Deemed credit under excise notifications upheld where duty was accepted under the ad valorem scheme despite prior use of the premises.

Where the Department permits a unit to operate under the ad valorem scheme and accepts duty paid at 50%, deemed credit under the relevant excise notifications cannot be denied merely because the premises had earlier housed another unit or because the compounded levy option was rejected. The Tribunal's grant of deemed credit was supported by the factual matrix, and the challenge failed. The ruling was confined to its facts and did not lay down any general rule beyond those circumstances.

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Issues: Whether the assessee was entitled to deemed credit of 50% under the relevant excise notifications despite the premises having earlier been used by another unit and the application for compounded levy having been rejected.

Analysis: The unit had shifted to the assessee on lease, had been allowed to pay duty under the ad valorem scheme, and had in fact discharged duty to the extent of 50% which was accepted by the Department. The rejection of the option to pay duty under the compounded levy scheme did not displace the fact that the assessee was permitted to operate and pay duty under the ad valorem scheme. In these circumstances, the Tribunal's grant of deemed credit was supported by the factual matrix, and the questions raised did not survive as substantial questions of law for general determination.

Conclusion: The assessee was entitled to the benefit of deemed credit, and the Revenue's challenge failed.

Final Conclusion: The order of the Tribunal was confirmed, with the clarification that the decision was limited to the facts and circumstances of this case and did not lay down any general rule.

Ratio Decidendi: Where the Department itself permits payment of duty under the ad valorem scheme and accepts such payment, it cannot later deny deemed credit under the applicable notifications on the footing that the unit is not a new unit for compounded levy purposes.

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