Alternative exemption route under Notification No. 1/93 cannot be denied merely because the assessee initially claimed the wrong clause.

A mistaken claim under clause 1 of Notification No. 1/93 did not forfeit entitlement to the distinct exemption route in clause 2, because that clause separately allowed an assessee not registered as a small scale industry to clear goods within the initial exemption limit and then move to duty payment with Cenvat credit. The assessee had followed the course contemplated by clause 2, so denial of that benefit was unsustainable. The demand-based denial was set aside and the alternative exemption route was upheld.

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Issues: Whether the assessee was entitled to the benefit under clause 2 of Notification No. 1/93 despite having claimed clause 1 in the classification list, and whether denial of such benefit was justified.

Analysis: Clause 1 of the notification applied where the factory was registered as a small scale industry, while clause 2 separately permitted an assessee not so registered to avail exemption up to the initial clearance limit and thereafter take Cenvat credit and pay duty at the full tariff rate. The assessee had followed the course contemplated by clause 2 after the initial exemption period. A mistaken claim under clause 1 did not, by itself, extinguish entitlement to the distinct benefit expressly available under clause 2.

Conclusion: The assessee was entitled to the benefit of clause 2, and denial of that benefit was unsustainable.

Final Conclusion: The demand-based denial was set aside and the assessee's entitlement to the alternative exemption route was upheld.

Ratio Decidendi: Where a notification expressly provides an alternative exemption or concessional route, an assessee's mistaken claim under an inapplicable clause does not bar availing the benefit of the clause that otherwise squarely applies.

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