Deemed credit under excise exemption: crossing the clearance threshold raised a referable question of law on exemption status.

The scope of deemed credit under the Government order dated 01.03.1994 was examined for a reroller that had crossed the aggregate clearances limit under Notification No. 1/93-C.E. The central question was whether crossing the Rs. 75 lakh threshold meant the unit was no longer "availing exemption" for purposes of Rule 57G(2) of the Central Excise Rules, 1944. On that interpretation issue, the Tribunal found the point was not free from doubt and treated it as a referable question of law. The matter was therefore referred to the High Court.

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Issues: Whether a referable question of law arose on the availability of deemed credit under the Government order dated 01.03.1994 to a reroller who had crossed the aggregate value of clearances limit under Notification No. 1/93-C.E.

Analysis: The order examined the expression "availing exemption" in the Government of India order issued under Rule 57G(2) of the Central Excise Rules, 1944, and its application to units covered by Notification No. 1/93-C.E. It noted that the respondent had crossed the threshold of Rs. 75 lakhs, and therefore the department's contention that the unit was no longer availing the exemption raised a substantial question on the scope of the benefit. On that basis, the Tribunal held that the issue was not free from doubt and required reference to the High Court.

Conclusion: A point of law did arise, and the matter was referred to the High Court.

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