SSI exemption notification preserves deemed Modvat credit after slab limit is crossed if overall eligibility remains satisfied.

An eligible small-scale industrial unit under Notification No. 1/93-C.E. could continue to avail deemed Modvat credit after crossing the slab exemption limit, because the concession was intended to ease input procurement and credit availability for SSI units. The benefit attached to the unit's SSI status did not cease merely on crossing the Rs. 75 lakh slab limit, so long as the notification's overall eligibility conditions continued to be satisfied and the SSI status remained intact. The question was therefore answered against the applicant and in favour of the assessee.

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Issues: Whether an industrial unit eligible for Notification No. 1/93-C.E. could continue to avail deemed Modvat credit after crossing the slab exemption limit of Rs. 75 lakhs, so long as its clearances remained within the overall eligibility parameters of the notification.

Analysis: The Tribunal's reasoning treated the concession as one intended to alleviate the practical difficulty faced by small-scale units in procuring inputs from the market and in availing Modvat credit. Once a unit answers the description of an eligible small-scale industry under the notification, the benefits attached to that status do not cease merely because the slab exemption limit is crossed, provided the overall eligibility conditions under the notification continue to be satisfied and the SSI status is not otherwise disturbed.

Conclusion: The question was answered against the applicant and in favour of the assessee. Deemed Modvat credit remained available to the eligible SSI unit even after crossing the slab exemption limit, subject to continued satisfaction of the notification's eligibility parameters.

Ratio Decidendi: Eligibility under an SSI exemption notification continues to carry the attendant Modvat benefit so long as the unit remains within the notification's overall eligibility framework, and crossing the slab exemption threshold by itself does not extinguish that benefit.

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