Exemption under Notification 180/1988 survived Modvat credit where Item 16 was outside the proviso's express denial.

Aluminium pipes falling under Item 16 of Notification No. 180 of 1988 remained exempt despite Modvat credit having been taken on inputs, because the second proviso withdrew exemption only for the specified items named in that proviso and Item 16 was not included. The omission was treated as deliberate, so exemption could not be denied by implication. Rule 57C of the Central Excise Rules, 1944 could not override the notification's express scope, and the Revenue's attempt to deny exemption on that basis failed.

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Issues: Whether aluminium pipes falling under Item 16 of Notification No. 180 of 1988 remained entitled to exemption even though Modvat credit had been taken on the inputs used in their manufacture, and whether Rule 57C of the Central Excise Rules, 1944 could be invoked to deny that exemption.

Analysis: The second proviso to the notification expressly denied exemption only in respect of the specified items listed therein if credit under the Modvat provisions had been availed. Item 16 was not among those specified items. The omission was held to be deliberate and significant, so the exemption for Item 16 could not be read as withdrawn by implication. Rule 57C, which disallows credit for inputs used in exempt or nil-rated final products, could not override the notification where the notification itself was consciously worded to permit exemption for items not covered by the proviso.

Conclusion: The exemption under Item 16 was available notwithstanding the availment and use of Modvat credit on inputs, and the Revenue's objection based on Rule 57C failed.

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