Broader tariff heading coverage can sustain deemed credit, and a missing sub-heading label cannot defeat the exemption benefit.

An exemption or deemed credit notification covering a broader tariff heading cannot be denied merely because a particular sub-heading is not separately named, if the final product falls within the covered heading. Read with the corrigendum and Board circular, Notification No. 29/96 was treated as extending deemed credit to inputs used for grey fabric manufacture by independent processors, including fibres, yarns, dyes, chemicals, consumables and packaging materials. The refund claim remained subject to verification of unjust enrichment. On that basis, the denial of deemed credit was held unsustainable and the exemption benefit was allowed.

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Issues: Whether the appellant was entitled to deemed credit under Notification No. 29/96 dated 3-9-96 in respect of inputs used in the manufacture of grey fabric, and whether the denial of the benefit on the ground that the final product was not specifically mentioned could be sustained.

Analysis: The notification, read with the corrigendum and the Board's Circular No. 243/77/96 dated 3-9-96, showed that Heading 5801 was included in the list of final products and that deemed credit for independent processors was intended to cover duty paid on inputs such as fibres, yarns, dyes, chemicals, consumables and packaging materials. The exclusion was not justified merely because a particular sub-heading was not separately named when the broader heading was covered. The claim for refund remained subject to verification on unjust enrichment.

Conclusion: The denial of deemed credit was unsustainable and the appellant was held entitled to the benefit of Notification No. 29/96, with refund subject to verification on unjust enrichment.

Final Conclusion: The appeals were allowed and the impugned order denying the exemption benefit and deemed credit was set aside.

Ratio Decidendi: Where an exemption or deemed credit notification expressly covers the relevant tariff heading, the benefit cannot be denied on the narrow ground that a particular sub-heading is not separately specified, if the broader heading clearly encompasses the final product.

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