Exemption for PVC compound at nil duty upheld despite input credit, where notification conditions were otherwise satisfied.

PVC compound cleared at nil rate of duty was held eligible for exemption under Notification No. 14/92 where the substantive conditions of the notification were met. The Tribunal followed its earlier orders in the same assessee's case and applied the principle that prior availment of credit on inputs does not, by itself, defeat the exemption when duty is paid on the resin used in manufacture in the manner recognised by those orders. On that basis, the exemption remained available and the demand was not sustainable.

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Issues: Whether the assessee was entitled to exemption under Notification No. 14/92 dated 01-03-1992 in respect of PVC compound cleared at nil rate of duty.

Analysis: The exemption had already been held applicable in the assessee's own case. The Tribunal followed its earlier orders, which in turn relied on the principle that availment of credit on inputs does not defeat the exemption where duty is ultimately paid on the resin used in the manufacture of the final product cleared at nil rate of duty.

Conclusion: The assessee was entitled to the benefit of exemption under Notification No. 14/92, and the demand was not sustainable.

Ratio Decidendi: An exemption under the relevant notification remains available where the substantive conditions are met, and prior input credit does not by itself disqualify the assessee when duty is paid in the manner recognised by the Tribunal's earlier binding orders in the same case.

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