Deemed credit under a notification cannot be taken before clearance of final products, as the timing condition is mandatory.

A deemed credit notification permitting credit without duty-paying documents allowed the credit only at the time of clearance of the final product. The scheme was treated as imposing a timing condition, so the manufacturer could not avail deemed credit earlier than clearance, unlike normal input credit taken on receipt of inputs. The departmental challenge failed because the assessees' claim to earlier credit was inconsistent with the notification's express restriction.

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Issues: Whether deemed credit under the relevant notification could be taken after clearance of the final products or only at the time of clearance.

Analysis: The notification allowed deemed credit to the manufacturer without production of duty-paying documents, but only at the time of clearance of the final product. The scheme was construed as imposing a condition that such credit should not be taken earlier than the date of clearance, unlike the normal input credit system where credit may be taken on receipt of inputs.

Conclusion: Deemed credit could not be taken prior to clearance of the final product, and the departmental challenge to the orders in favour of the assessees failed.

Ratio Decidendi: Where a deemed credit notification permits credit only at the time of clearance of the final product, the credit cannot be availed earlier than that clearance.

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