TaxTMI 
TaxTMI 
2017 (1) TMI 1185
X X X X Extracts X X X X
X X X X Extracts X X X X
....No.50/2003-CE ibid but deposited a sum of Rs. 1,74,67,304/- in cash on account of reversal of the cenvat credit of inputs contained in inputs, work in process and finished goods at the time of opting for availing the exemption Notification NO.50/2003-CE dated 10.6.2003. Later on realizing that the assessee was not required to deposit the said amount, the assessee filed refund claim on 15.6.2004 within one year of the deposit. The said refund claim was rejected by the adjudicating authority vide order dated 28.9.2010. The said order was challenged by the assessee before the Commissioner (Appeals) who sanctioned the refund claim under section 11B of the Act but the same was allowed to be refunded by way of re-credit to their Cenvat Credit Account and held that the cash refund cannot be given to the assessee. Aggrieved from the said order, both sides are in appeal. The assessee is in appeal on the ground that as they are not able to utilize the Cenvat Credit Account, therefore, the refund is to be given in cash whereas the Revenue is in appeal on the ground that the Commissioner (Appeals) erred in holding that the assessee is entitled for refund claim. 3. Heard the parties and cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts. Therefore, the judgment in the aforesaid case squarely applies to the case on hand and the Tribunal was justified in granting benefit. 5. It was pointed out to us that in the year 2008 (sic) sub-rule (3) was inserted by a Notification No. 10/2007 with effect from 1-3-2007, which reads as under :- (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el that the interpretation given by the Apex Court has to apply in the present case also and, therefore, even though the final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it." 9. Further in the case of Himachal Futuristic Communications Ltd. vide Final Order No.61395-61396/2016-EX (DB) dated 19.9.2016 wherein this Tribunal has observed as under: 5. We find that the sole question for consideration is that whether the inputs lying in stock on the date on which exemption Notification No.50/2003-CE dated 10.6.2003 exempted final product, the appellant is required to reverse the credit lying in their stock or not. 6. The issue came up before this Tribunal in the case of H.M.T. (supra) wherein the larger bench of this Tribunal has observed as under: 20. On perusal of the Rule 6 of Rules, 2002 and the corresponding Rules, as mentioned above, we are of the view that the Appellants had correctly taken the credit and utilised, when the final product was dutiable and there is no requirement to reverse the credit on final product becoming exempt and such credit cannot be recovered under R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alance, if any, lying in his credit, the balance, if any, still remains shall lapse and shall not be allowed to be utilized for payment of duty on excisable goods, whether cleared for home consumption or for export. 8. After considering the Rule 57, the Apex Court held as follows :- 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 be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te for considering exemption from duty of the end product in or in relation to which inputs are used is the date of its receipt in factory and condition is its actual use in or in relation to manufacture of end product by the manufacturer. The chargeability to duty or non-chargeability due to exemption or notified nil rate is to be considered at the stage before goods are actually produced, but on receipt of inputs intended to be used in manufacture of such goods. That being so ultimate clearance of goods at nil rate due to contingency existing at the time of removal does not affect the entitlement that legally arises long before that date. 13. We are in respectful agreement with the judgment of the Kerala and Rajasthan High Courts. Since the language of Rule 9(2) of the Cenvat Rules is identical to that of Rule 57H(5) of the Excise Rules, we feel that the interpretation given by the Apex Court has to apply in the present case also and, therefore, even though the final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. 14. In view of the above discussion, the question is answered in favour o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t in its right perspective. The decisions have been brushed aside and dealt with in a cryptic and perfunctory manner. On this aspect we refrain from saying anything further. It is not that the earlier view taken by this Court merely based upon the decisions rendered by the High Court of Rajasthan [2008 (223) E.L.T. 149 (Raj.)]. In fact this Court, while deciding the aforesaid appeals, took into account not only the relevant provisions of law but also the decisions rendered by various High Courts as also the Apex Court in Excise, Pune and Others v. Dai-Ichi Karkaria Ltd. and Others, 1999 (112) E.L.T. 353 (S.C.) = (1999) 7 SCC 448. 9. As the issue has already been settled in favour of the appellants, therefore, we hold that at the time opting area based exemption of Notification No.50/2003-CE dated 10.6.2003, the appellants are not required to reversed the credit in their cenvat credit account lying unutilized. 10. As the issue has already been settled by various judicial pronouncements, therefore, the issue no more res-intera. Therefore, we hold that the assessee is not required to reverse the credit which was availed at the time when the final product was dutiable while optin....