- (1.) Indubitably, the benefit of exemption Notification No. 5/99-C.E., dated 28-2-1999 is available subject to certain conditions and one of the conditions is that the assessee had not taken any credit under Rule 57A or Rule 57B or Rule 57Q of the Central Excise Rules, 1944, in the process of dyeing, printing, bleaching or mercerising in the manufacture of dyed, printed, bleached or mercerised yarn.
(2.) As mentioned above, this Notification was issued on 28-2-1999. The product of the respondent is covered by the description of goods at Serial No. 133 of the Table annexed with the General Exemption Notification. The assessee, however, had utilised the MODVAT credit in the previous two years prior to 28-2-1999. As per the assessee, after the issuance of this notification, no such MODVAT credit was ever taken or utilized. Even the earlier MODVAT credit which was utilised was returned or paid back on 10-1-2005. In this scenario, question arose as to whether the assessee fulfils the aforesaid condition in order to become eligible to get the benefit of the Exemption Notification.
(3.) We note that five-Member Bench of the Tribunal in the case of 'Franco Italian Co. Pvt. Ltd. v. Commissioner' [2000 (120) E.L.T. 792 (T.-LB)] had taken the view that even if the MODVAT credit was utilised but, thereafter, refunded, it would amount to not utilising the said MODVAT credit. Same view has been taken by the High Court of Allahabad in 'Hello Minerals Water (P) Ltd. v. Union of India' [2004 (174) E.L.T. 422 (All.)].;