Factory-wise MODVAT credit restriction under the exemption notification applied only to the unit claiming benefit, not other factories.

Condition No. 10 in Notification No. 5/99-C.E. was construed as a factory-wise restriction on MODVAT credit, not a company-wide bar across all units of the same manufacturer. As the exempting unit had not availed credit in relation to goods manufactured in that factory, exemption could not be refused merely because another factory of the same assessee had taken MODVAT credit. The assessee was therefore entitled to the notification benefit, and the Revenue's challenge failed.

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Issues: Whether the assessee was entitled to exemption under Notification No. 5/99-C.E. dated 28th February, 1999 when MODVAT credit was availed in a different factory of the same manufacturer.

Analysis: Condition No. 10 of the notification restricted availment of credit in respect of the goods covered by the notification or any other product manufactured in the same factory. The restriction was held to operate factory-wise and not across all factories owned by the same manufacturer. Since the unit claiming exemption had not availed MODVAT credit in relation to goods manufactured in that factory, the notification could not be denied merely because another factory of the same assessee availed credit.

Conclusion: The assessee was entitled to the benefit of the exemption notification, and the Revenue's challenge failed.

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