Exemption under Notification No. 5/98-CE depends on MODVAT credit restrictions across all factory products.

The exemption under Notification No. 5/98-CE depended on Condition No. 10, which required that the manufacturer not avail MODVAT credit on the exempted products or on any other products manufactured in the same factory. Although there was no dispute that credit was not taken on the specified exempted products, the Tribunal had not recorded a clear finding on whether credit had been availed on other products and whether that affected eligibility for exemption. Because the factual foundation for applying the notification was incomplete, the Tribunal's order was set aside and the matter was remitted for fresh consideration in accordance with law.

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Issues: Whether the benefit of Notification No. 5/98-CE could be denied or allowed on the basis of condition No. 10 when the assessee had availed MODVAT credit under Rules 57-A and 57-B on other products manufactured in the same factory.

Analysis: The exemption under the notification was available only subject to the manufacturer not availing credit of duty on the products covered by the notification or on any other products manufactured in the same factory. The record showed that there was no dispute about non-availment of credit on the specified exempted products, but the Tribunal had not recorded any clear finding on whether the assessee had availed credit on other products manufactured in the same factory and whether that credit had any bearing on the exemption. In the absence of such a clear finding, the factual basis for the grant of exemption was incomplete.

Conclusion: The Tribunal's order was set aside and the matter was remitted to the Tribunal for fresh in accordance with law.

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