Simultaneous SSI exemption and Modvat credit permitted for different goods under separate tariff headings.

SSI exemption and Modvat credit may be claimed simultaneously where they relate to different goods classified under different tariff headings and are not taken in respect of the same item. Earlier Tribunal decisions had accepted this position, and that line of authority was treated as settled because the Supreme Court had dismissed the Department's challenge to the precedent followed. Applying that principle, the assessee was entitled to Modvat credit on the wired chassis while also claiming SSI exemption on the tape recorder. The contrary view based on a different precedent was rejected, and the departmental challenge failed.

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Issues: Whether Modvat credit can be availed in respect of one commodity while SSI exemption under Notification No. 175/86-C.E. is availed in respect of another commodity falling under a different tariff heading.

Analysis: The exemption and credit were claimed for different goods classifiable under different headings, and earlier Tribunal decisions had accepted simultaneous availment in such circumstances. The reasoning in the earlier line of cases was treated as settled, particularly because the Supreme Court had dismissed the Department's challenge to the decision followed in that line of authority. On that basis, the contrary view based on a different precedent was not accepted.

Conclusion: The assessee was entitled to avail Modvat credit on the wired chassis while claiming SSI exemption on the tape recorder, since the two benefits related to different items under different tariff headings.

Final Conclusion: The departmental challenge failed and the order allowing simultaneous availment of the two benefits was sustained.

Ratio Decidendi: SSI exemption and Modvat credit may be simultaneously availed where they relate to different goods falling under different tariff headings and are not claimed in respect of the same item.

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