Deemed credit remains available after crossing the exemption threshold where the scheme and order permit continued entitlement.

Deemed credit under the Ministry's Order No. TS/36/94-TRU dated 1.3.94 was treated as available to a unit operating under Notification No. 1/93-CE even after it crossed the exemption limit and began paying duty at the normal rate. The Punjab & Haryana High Court followed its earlier Division Bench view that entitlement to excess payment up to the prescribed threshold, and then to the higher limit, continued within the exemption scheme, and that deemed credit could be taken without production of documents. The reference was answered in favour of the assessee on that basis.

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Issues: Whether deemed credit under Ministry's Order No. TS/36/94/-TRU dated 1.3.94 is available to a unit availing exemption under Notification No. 1/93-CE dated 28.2.93 after crossing the exemption limit and paying duty at the normal rate.

Analysis: The reference was decided by following the earlier Division Bench view that a manufacturer remains entitled to the benefit of excess payment up to the prescribed threshold and thereafter up to the higher limit, and that deemed credit can be availed without production of documents. The question referred was answered consistently with that binding approach.

Conclusion: The deemed credit benefit is available to such a unit even after it crosses the exemption limit and starts paying duty at the normal rate, and the question was answered in favour of the assessee.

Final Conclusion: The reference was answered by extending deemed credit entitlement to the assessee notwithstanding the crossing of the exemption limit.

Ratio Decidendi: Where the governing exemption scheme and administrative order so permit, deemed credit cannot be denied merely because the unit has crossed the exemption threshold and has begun paying duty at the normal rate.

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