Clarification regarding credit taken on inputs used in the manufacture of textile articles cleared under notification No.14/2002-CE or notification No. 30/2004-CE

Cenvat credit reversal recognized as equivalent to non availment, restoring exemption eligibility under central excise textile notifications.

Reversal of CENVAT credit before utilization is treated as equivalent to non availment, and therefore does not bar a manufacturer from claiming exemption on textile articles cleared under the textile exemption notifications; the Board amends its earlier circular to reflect the Supreme Court's position and notes that the CENVAT Credit Rules require reversal of credit on inputs used in the manufacture of such exempted textile goods.