- (1.) THIS is a petition under Section 35(H) of the Central Excise Act by the assessee, on the following question framed in the application: Whether the substantive benefit of exemption can be denied for procedural irregularities?
(2.) THE necessary facts are, that the petitioner is a manufacturer of aerated water. The manufacturer used to manufacture aerated water in two brands; one being Campa, and another being Mr. Dik Soda. Out of the two products, the product manufactured in the name of Campa is excisable. However, the product in the name of Mr. Dik is not excisable, being covered by exemption notification. The controversy involved in the present case arose in the circumstances, that petitioner is using inputs in manufacture of two products, and is availing Modvat Credit on such inputs. As the inputs for the two products are common, the question arose, because the petitioner sought to avail the Modvat Credit, with respect to the product, on which excise duty is not leviable. But the department did not allow such Credit, on the ground, that there is no provision for reversal.
(3.) LEARNED Assistant Collector vide order dated 16.03.95 held, that full exemption upto Rs. 30 lacs under the Notification 1/93, in respect of Dik brand aerated water is not admissible. It was also held, that Classification list effective from 01.03.94 and 01.04.94 are accordingly modified, to deny the benefit of full exemption upto Rs. 30 lacs, to Dik brand Aerated water.;