Reversal of input credit and prior dropped notices defeated the duty demand on clinker, leaving no merit in the Revenue challenge.

Credit attributable to inputs used in exempted clearances was reversed, and the adjudicating authority accepted that reversal in de novo proceedings and dropped the duty demand on clinker. The disputed period was also covered by earlier notices in which the demand had already been dropped. On those facts, the basis for the Revenue's challenge did not survive, and the appeal was rejected on merits.

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Issues: Whether the Revenue's appeal against the dropping of duty demand on clinker could be sustained when the credit attributable to inputs used in exempted clearances had already been reversed and the disputed period was covered by earlier notices.

Analysis: The disputed demand arose from clearances of cement under exemption notifications and from the manufacture and consumption of clinker as an intermediate product. In the de novo proceedings, the adjudicating authority accepted the reversal of credit on inputs used for exempted goods and dropped the proceedings. The disputed period in the present show cause notices was covered by earlier notices in which the demand had already been dropped. On these facts, the basis for sustaining the Revenue's challenge did not survive.

Conclusion: The Revenue's appeal was not maintainable on merits and was rejected.

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