SSI exemption cannot be denied merely because Modvat credit was taken on different goods

SSI exemption under Notification No. 175/86-C.E. could not be denied merely because Modvat credit was availed on different goods, where the two benefits were not claimed for the same item. The Tribunal noted that the assessee sought exemption for dies, while credit related to raw aluminium castings, so the notification could not be used to refuse the exemption on that basis. The matter was treated as covered by prior Tribunal decisions supporting the assessee's position, and the exemption was held to remain available on the facts stated.

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Issues: Whether SSI exemption under Notification No. 175/86-C.E. could be denied merely because Modvat benefit had been availed in respect of different goods.

Analysis: The appellants claimed SSI exemption for dies, while Modvat credit was taken for raw aluminium castings. The two benefits were not sought in respect of the same item. The Tribunal held that the notification could not be applied to deny exemption on this ground, and the matter was covered by the cited Tribunal decisions supporting the assessee's position.

Conclusion: SSI exemption could not be denied on the facts of the case. The issue was decided in favour of the assessee.

Ratio Decidendi: SSI exemption cannot be refused merely because Modvat credit has been availed for a different product, where both benefits are not claimed for the same item.

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