Modvat credit in one unit does not bar small-scale exemption for clearances from another separate factory.

Separate excise units with distinct licences were treated independently for Notification No. 1/93-C.E. purposes, because the phrase "by a manufacturer, from one or more factories" was read only as an aggregation rule for computing prior-year clearances. Availment of Modvat credit in one unit did not by itself disqualify exemption for clearances from another unit. The analysis also noted that the same issue had already been decided in the assessee's favour in its own case, with no shown reversal by a higher forum, reinforcing the view that the exemption remained available for the other unit.

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Issues: Whether availment of Modvat credit in one unit disentitled the assessee from claiming exemption under Notification No. 1/93-C.E. for clearances from another unit.

Analysis: The assessee had two separate units with separate excise licences. The notification used the expression "by a manufacturer, from one or more factories" only for computing the aggregate value of clearances in the preceding financial year. That wording did not prohibit exemption for goods cleared from one unit merely because Modvat credit was availed in the other unit. The same question had already been decided in the assessee's favour in its own case, and no reversal of that decision by a higher forum was shown.

Conclusion: Availment of Modvat credit in one unit did not bar exemption under Notification No. 1/93-C.E. for the other unit, and the appeal was rightly rejected.

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