Exemption on ceramic tiles denied where input credit was availed, breaching the notification condition.

The exemption and refund benefit for ceramic tiles under Notification No. 6/2002-C.E., as amended by Notification No. 45/2003-C.E., was conditional on non-availment of credit on duty paid inputs used in manufacture. Because the appellants had taken such credit on inputs used in relation to ceramic tiles, the condition attached to the exemption was breached and the benefit could not be claimed. The stated outcome was that the appellants were not entitled to the refund or exemption benefit, and the finding was against the assessee.

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Issues: Whether the appellants were entitled to refund or exemption benefit under Notification No. 6/2002-C.E., as amended by Notification No. 45/2003-C.E., when they had taken credit of duty paid on inputs used in the manufacture of ceramic tiles.

Analysis: The notification scheme extended benefit to ceramic tiles manufactured in specified units, but the amended entry made the benefit conditional upon non-availment of credit on duty paid inputs used in or in relation to the manufacture of such tiles. The record showed that the appellants had availed such credit. Once the condition attached to the exemption was breached, the benefit of the notifications could not be claimed.

Conclusion: The appellants were not entitled to the refund or exemption benefit, and the finding was against the assessee.

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