Deemed credit under excise notification remained available where the manufacturer did not use the special procedure and paid ad valorem duty.

A manufacturer who did not avail the special procedure under Rule 96ZNA and instead paid ad valorem duty was not within the exclusion created by the amended notification. The scheme of Notification No. 07/2001-Central Excise (N.T.), as amended by Notification No. 17/2001-Central Excise (N.T.), treated as only those manufacturers who used the special procedure under Rule 96ZNA and paid duty under Rule 96ZNC; para 4A withdrew deemed credit only for that class. On the facts recorded, the respondents had not taken that benefit, so the restriction did not apply and the Tribunal's view was consistent with the notification scheme.

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Issues: Whether a manufacturer who had not availed the special procedure under Rule 96ZNA and had paid ad valorem duty could be denied deemed credit under Notification No. 07/2001-Central Excise (N.T.), as amended by Notification No. 17/2001-Central Excise (N.T.).

Analysis: The relevant notifications and rules created a distinct position for manufacturers who availed the special procedure prescribed under Rule 96ZNA and paid the specified duty under Rule 96ZNC. Para 4A of the amended notification excluded only such manufacturers from the benefit of the earlier notification. On the facts recorded, the respondents had cleared the goods on payment of ad valorem duty and had not taken the benefit of the special procedure contemplated by para 4A. The Tribunal's view that the amended restriction did not apply to the respondents was therefore consistent with the scheme of the notifications.

Conclusion: The question was answered in the affirmative in favour of the assessee and against the Revenue; the Tribunal's order was upheld.

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