Alternate exemption benefit under duty scheme cannot be denied merely because assessee initially chose concessional duty with credit.

An exemption and concessional duty scheme providing mutually available options did not require assessees to remain bound by the option initially chosen, where the alternate beneficial route to clear goods without duty remained legally available for the relevant period. The Tribunal noted that the department could not insist on only one option and disregard entitlement to the other permissible benefit. On that basis, confirmation of differential duty on the footing that only one option applied was not sustainable, and the matter was remanded for fresh adjudication after hearing the assessees.

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Issues: Whether, under the exemption and concessional duty scheme, the assessees who had initially chosen the option of payment of concessional duty with Modvat credit could be denied the alternate benefit of clearing the goods without payment of duty for the relevant interim period, and whether the demand of differential duty was sustainable.

Analysis: The notification scheme provided two mutually available options. The assessees had taken one option, but the scheme did not preclude re-election of the alternate beneficial option where it remained available. The Tribunal relied on its earlier decisions holding that where an alternate benefit exists under the scheme, the department cannot insist on only one option and ignore the assessee's entitlement to the other beneficial route. On that basis, the order confirming differential duty on the footing of only one option was not sustainable.

Conclusion: The appeals were allowed and the matters were remanded to the jurisdictional Commissioner (Appeals) for fresh decision after giving the assessees an opportunity of hearing.

Ratio Decidendi: Where an exemption or concessional duty scheme affords an alternate beneficial option, the assessee cannot be confined to the initially chosen option if the alternate route remains legally available and can be considered in adjudication.

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