Full Judgment
2. The dispute relates to availment of benefit of deemed Modvat credit by small scale units availing exemption under Notification No. 1/93-CE dated 28.2.93. From the records of the case one can gather that vide Ministry's letter F.No. TS/35/94-TRU dated 1.3.94, units availing small scale exemption were permitted to take credit in respect of specific inputs without producing duty paying at the rates specified therein. It appears that, upto the value limit of Rs. 75 Lakhs , the appellants were paying concessional duty and they were availing the benefit of taking deemed credit without production of duty paying documents. Only after crossing the limit of Rs. 75 Lakhs, the continuation of taking credit in the aforesaid manner is being objected, drawing support to such objection from the Ministry's aforesaid letter dated 1.3.94.
3. Despite several opportunities granted to the D.R., he was unable to produce a copy of the said letter. Neither the Commissioner nor the respondents enclosed a copy thereof in the appeal papers/written submissions. However, from the copy of Ministry's MF (DR) order No.75/8/95-TRU dated 16.3.95 I can gather that the letter F.No. TS/36/94 -TRU dated 1.3.94, granted the facility of taking deemed Modvat credit to "units availing the exemption under Notification No. 1/93-CE dated 28.2.93." 4. In case the language used in the said letter dated 1.3.94 is to the effect that, the facility was available to "Unit availing exemption under Notification No. 1/93 CE," then in that event, after crossing the value limit of Rs. 75 Lakhs, such unit can not be considered to be a unit, which is not availing the exemption under Notification No. 1/93 CE. The facility is extended to a unit and not to a particular part of the production of such a unit. For availing the facility of deemed credit the "unit" has to demonstrate that he is availing small scale exemption under notification No. 1/93-CE.5. It must be remembered that, the eligibility of a unit to small scale exemption is determined for each financial year. Once such determination is done and not disputed, as is the case in the present proceedings, the character of the unit continues to be a unit availing small scale exemption under Notification No. 1/93-CE, whereas the production beyond the value of Rs. 75 Lakhs would pay full duty.
6. On these considerations, I hold that, the revenue appeal is liable to be rejected on this ground alone. However, on going through the order-in-original, I am unable to decipher as to whether the facility of deemed credit has been availed beyond 15.3.95 i.e. the date after which the said facility was withdrawn vide MF (DR) Order No. TS/8/95 TRU dated 16.3.95. Therefore I remand this case back to the Assistant/Deputy Commissioner concerned only for the limited purpose to segregate the credit amount, taken beyond 15.3.95 and pass fresh orders thereon within 3 months from the date of this order regarding its eligibility, in accordance with law, after following the principles of natural justice.
7. The appeal of the Revenue is allowed only to the extent above, by way of denovo remand and consequently the orders of the lower authorities are set aside.