2009 (2) TMI 654 - AT - Central Excise

Appellate Tribunal Upholds Denial of Modvat Credit for Duty-Exempt Final Product

The Appellate Tribunal CESTAT, Ahmedabad upheld the decision to deny Modvat credit to the appellant as the final product was duty exempt. The Tribunal ... Payment of duty while exemption available - Held that: - apart from the fact that the assessee has the option to choose between exemption and payment of duty, as held by Tribunal in umpteen number of judgments, we note that the Commissioner (Appeals) has observed that such final product cleared by the appellant by payment of duty, were exported under the claim of rebate. If the appellants would not have chosen to pay duty on the final product, the credit so availed by them in respect of inputs is admissible as refund by way of rebate - the entire situation is Revenue neutral - appeal dismissed - decided against Revenue. The Appellate Tribunal CESTAT, Ahmedabad upheld the original adjudicating authority's decision to deny Modvat credit to the appellant, as the final product was exempt from duty. The Tribunal noted that the appellant had the option to choose between exemption and duty payment, and since the final products cleared by the appellant were exported under rebate claims, the situation was Revenue neutral. The Revenue's appeal was rejected.