Input credit entitlement limited where intermediates are cleared exempt under Chapter X; paying duty lets Modvat credit be availed. The Board confirms that Modvat/input credit is not available where intermediate products are exempted and cleared under Chapter X; alternatively, manufacturers may forego the Chapter X exemption, pay duty on intermediates at clearance and utilise Modvat/input credit for that duty, allowing credit without following the Chapter X procedure, and no amendment to Notification No. 97/89-C.E. is required.