Delayed Cenvat credit reversal did not bar exemption under Notification No. 8/2003-CE once the credit was reversed.

Delayed reversal of Cenvat credit after opting for exemption under Notification No. 8/2003-CE did not, by itself, defeat the exemption claim. The Tribunal treated the condition as satisfied once the credit lying in the Cenvat account was reversed, even though the reversal occurred after the effective date of opting for exemption. Relying on its earlier view in the assessee's own case for an earlier period, it held that the exemption could not be denied on this ground and the duty demand based on such denial could not survive.

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Issues: Whether the respondent was entitled to the benefit of Notification No. 8/2003-CE despite reversal of Cenvat credit being made after opting for the exemption.

Analysis: The respondent had availed Cenvat credit on inputs and later opted for exemption under Notification No. 8/2003-CE. The Tribunal noted that the credit lying in the Cenvat account was reversed, though the reversal was made on 08.04.2008 after the effective date of opting for exemption. Following its earlier decision in the respondent's own case for a prior period, the Tribunal held that delayed reversal of credit did not by itself disentitle the assessee from the exemption. Once the credit stood reversed, the condition was treated as satisfied and the duty demand founded on denial of the notification could not survive.

Conclusion: The respondent was entitled to the exemption notification and was not liable to pay the demanded duty.

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