Deemed credit under a pari materia notification applies to inputs used for export clearances to a 100% EOU.

Deemed credit was held admissible under the first proviso to para 3 of Notification No. 6/2002-CE (NT) for declared inputs used in fabrics cleared to a 100% EOU for export, because the notification was treated as pari materia with the earlier provision already interpreted in the assessee's favour. That earlier Tribunal ruling, supported by a Larger Bench decision, continued to apply to the same credit scheme. Mere pendency of the related question before the High Court did not stay or dilute the Tribunal's earlier order, so the Revenue could not rely on that pendency to resist the credit claim.

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Issues: (i) Whether, under the first proviso to para 3 of Notification No. 6/2002-CE (NT), deemed credit was admissible on declared inputs used in the manufacture of fabrics cleared to a 100% EOU for export; (ii) whether pendency of the related question before the High Court prevented reliance on the Tribunal's earlier decision and the Larger Bench ruling.

Issue (i): Whether, under the first proviso to para 3 of Notification No. 6/2002-CE (NT), deemed credit was admissible on declared inputs used in the manufacture of fabrics cleared to a 100% EOU for export.

Analysis: The relevant wording of para 3 of Notification No. 6/2002-CE (NT) was treated as pari materia with the earlier notification considered in the assessee's own case. The earlier Tribunal ruling, based on the Larger Bench decision, had accepted deemed credit for inputs used in final products cleared to a 100% EOU for export. The same principle was held applicable because the notification scheme and the credit entitlement were materially the same.

Conclusion: The assessee was entitled to deemed credit; the issue was decided in favour of the assessee.

Issue (ii): Whether pendency of the related question before the High Court prevented reliance on the Tribunal's earlier decision and the Larger Bench ruling.

Analysis: Mere pendency of a reference or question of law before the High Court was held not to operate as a stay of the Tribunal's order. In the absence of any stay, the Tribunal's earlier order continued to hold the field, and the Revenue could not seek to keep the appeal in abeyance on that ground.

Conclusion: The pendency before the High Court did not affect the binding force of the Tribunal's earlier decision; this issue was decided against the Revenue.

Final Conclusion: The appellate order allowing deemed credit was sustained and the Revenue's challenge failed.

Ratio Decidendi: Where the credit notification is pari materia with an earlier notification already interpreted by the Tribunal, that interpretation governs unless stayed or displaced, and mere pendency of a reference before the High Court does not suspend the operation of the Tribunal's order.

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