2011 (9) TMI 686

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d co-boxes falling under Chapter sub-headings 8536.90 and 8538.00 of the Central Excise Tariff Act, 1985. A show-cause notice dated 30-4-1990 was issued to the appellant that they availed duty exemption on the goods falling under Chapter sub-heading 8538.00 under Notification No. 144/89-C.E., dated 19-5-1989 and also took Cenvat credit of duty paid on excisable goods used as inputs in the manufacture of the goods under Rule 57A of the Central Excise Rules, 1944. Inasmuch as the goods were cleared by availing exemption under Notification No. 144/89, the inputs which are used in the manufacture of the said goods on which credit has been availed and the inputs which remained in process of manufacture on which credit have been taken are not eli....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Dai Ichi Karkaria Ltd. reported in 1999 (112) E.L.T. 353 (S.C.). In the said case the Hon'ble Apex Court has held as follows :- "17. It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilized, has to....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....products are purchased subsequent to the said exemption and if any tax is paid on such inputs, as the final product is exempted from payment of tax, the assessee would not be entitled to avail the Cenvat credit on such inputs. But the Cenvat credit availed on such inputs till the date of exemption, they vest in the assessee and the asseessee cannot be divested of that credit as the law does not provide for the same. Therefore the authorities taking advantage of the notification exempting the final product cannot claim reversal of CENVAT credit either in respect of final product which have come into existence on the date of the notification or on the inputs stored in the godown or the work in progress and finished products." 4. The l....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....it cannot be recovered at a subsequent point of time on the ground that the product has become exempted at a later point of time. The same principle has been followed by the Hon'ble High Courts of Himachal Pradesh, Panjab & Haryana and also the Hon'ble High Court of Karnataka in the cases cited (supra). Therefore, what is relevant is at the time of taking credit and utilization of the credit, whether the assessee was entitled for the same. Once the assessee is entitled, then the question of reversal of the same at a subsequent point of time does not arise at all. In the case of Amrit Paper (supra) relied upon by the department, the facts of the case were different. In that case the Hon'ble Apex Court held that the Rule 57C provides in manda....