CENVAT credit need not be reversed when the final product later becomes exempt, following binding precedent.

Credit validly taken under the CENVAT scheme was considered not liable to reversal merely because the final product later became exempt from duty. The Court noted that the issue was already covered by an earlier Division Bench decision of the same Court, which had answered the identical question in favour of the assessee. Applying that binding precedent, the Court rejected the Revenue's contention and treated the subsequent exemption as not triggering reversal of the credit in the manner argued.

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Issues: Whether credit validly taken under the CENVAT scheme is required to be reversed when the final product subsequently becomes exempt from duty under Rule 6(1) of the CENVAT Credit Rules, 2002.

Analysis: The Court held that the question raised was covered by an earlier Division Bench decision of the same Court, which had already answered the identical issue in favour of the assessee. Following that binding decision, the Court treated the subsequent exemption of the final product as not warranting reversal of credit in the manner contended by the Revenue in this appeal.

Conclusion: The issue was answered against the Revenue and in favour of the assessee.

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