Modvat credit on inputs did not defeat exemption for plastic waste, scrap and pairings under Notification No. 14/92.

Notification No. 14/92 was available for waste, scrap and pairings of plastic generated from duty-paid inputs, even where Modvat credit had been taken on those inputs. The taking of credit did not change the inputs' duty-paid character, and the notification contained no bar denying exemption on that basis. Rule 57F was considered only in relation to clearance of inputs as such, and it did not displace the exemption claim on the facts stated. The practical effect was that the waste, scrap and pairings remained eligible for exemption under the notification.

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Issues: Whether the benefit of Notification No. 14/92 was available in respect of waste, scrap and pairings of plastic generated from inputs on which Modvat credit had been taken.

Analysis: The availability of Modvat credit on the inputs did not alter their duty-paid character. Since the waste, scrap and pairings arose out of such inputs and the notification did not bar exemption on this ground, the condition relied upon to deny relief was not established. Rule 57F was noted in the context of clearance of inputs as such, but it did not defeat the exemption claim on the facts found.

Conclusion: The benefit of Notification No. 14/92 was available to the assessee.

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