Exemption and Modvat credit cannot be claimed together for the same clearances; refund of duty was rightly rejected.

Where goods were wholly exempt during March 2000, the assessee could not retain Modvat credit and also claim refund of duty for the same clearances after reversing that credit. The refund claim was rejected because it effectively sought the benefit of both exemption and credit for the same period, which was impermissible under Notification No. 6/2000-C.E. The reliance on a different exemption structure was found inapplicable on the facts. The rejection of refund was therefore maintained.

---

---

Issues: Whether the appellant was entitled to refund of duty paid for March 2000 after having availed Modvat credit and subsequently reversed the credit, in the light of Notification No. 6/2000-C.E. dated 1-3-2000.

Analysis: The goods manufactured by the appellant were wholly exempted during March 2000. The appellant had availed credit and cleared the goods under the exemption, later reversed the credit and paid duty, and then sought refund. The earlier refund of the reversed credit had already been allowed and was not challenged. The reliance on the decision concerning a different exemption structure was held to be inapplicable because, in the present case, the entire class of goods was exempt and the refund claim effectively sought the benefit of both credit and exemption for the same period.

Conclusion: The refund claim was not sustainable and was rightly rejected.

Final Conclusion: The appeal failed, and the rejection of refund was maintained.

Ratio Decidendi: Where exempted goods are cleared during the relevant period, an assessee cannot simultaneously retain the benefit of credit and claim refund of duty for the same clearance period after seeking the benefit of the exemption notification.

---