TaxTMI 
TaxTMI 
2017 (3) TMI 1146
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.... on 1-3-2002. Some of these inputs were later used for manufacture of goods which were exported under bond/undertaking. The appellant filed a refund claim of Rs. 28,96,762/- on the ground that in view of Larger bench judgment in CCE Vs. Ashok Iron-[2002(140) ELT 277(T-LB)], the credit availed and utilized during the period, when final product was dutiable was not required to be paid back, when the final product subsequently became exempt. They also filed two more claims of Rs. 11,41,609/- and Rs. 1,24,252/- on the ground that the final product having been exported under bond, the credit was not required to be reversed. The adjudicating authority rejected the claim on the ground that since the goods were exempted as on 1-3-2002 refund claim is not maintainable. The adjudicating authority also held that refund can only be eligible to the appellant by way of rebate of duty paid on excisable goods used in the exports goods. Since the appellant have not followed the procedure for claiming rebate of such duty as prescribed under Notification No. 41/2001-CE(NT) dated 26-6-2001, accordingly, the refund was rejected. Being aggrieved by the Order-in-Original, appellant filed appeal before th....
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....-21/Ref KDN/SY/201-4-15 daed 13.8.2014 passed by Asstt. Commissioner, Central Excise, Mumbai.-III (n) Order-in-Appeal No. CD/555/1\4-111/5 dated 12.6.2015 passed by Commissioner (Appeals), Mumbai (o) Order-in-Original No. 37/REF/KDN/SY/15-16 dated 30.11.2015 passed by Asstt. Commissioner, Central Excise, Mumbai-III (p) Tractor & Farm Equipment Ltd. Vs CCE 2015 (320) ELT 357 (Mad.) Affirmed by Supreme Court in Commr. Vs. Tractor & Farm Equipment 3. On the other hand, Shri. Ajay Kumar, Ld. Joint Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits Ld. Commissioner (Appeals) has rightly denied refund following the ratio of the Larger bench decision in case of Raghuvar (India) Ltd Vs. CCE[2002(140) ELT 280(T-LB). 4. I have carefully considered the submissions made by both sides and perused the records. 5. Issues to be decided by me in the present appeal are as follows: (a) Whether the appellant is liable to reverse/pay Cenvat Credit on the inputs already used in the manufacture of final product when it was dutiable but lying in stock as on 1-3-2002 when final product became exempted. (b) Whether the appellant i....
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.... that for the previous period there was no requirement of reversal of credit on the input. When the credit was availed, final product was dutiable and subsequently got exempted. On this very issue much water has been flown and in the judgments cited by the Ld. Counsel it has been consistently held that the Modvat credit need not to be reversed on the stock of input lying in stock when the final product became exempted. In the case of Ashok Iron & Steel Fabricators(supra) the larger bench of this tribunal which was upheld by the Hon'ble Supreme Court, held as under : 6. Before the Supreme Court the Attorney General drawing support from the decision in Super Cassettes Industries Ltd. contended that there could be no final credit until the inputs were used and excise duty on the final product was paid or the inputs were otherwise disposed of. The submission was that the credit was a contingent credit. It might be disallowed under certain circumstances. The manufacturer did not have any indefeasible right or title to it. The credit of excise duty on the raw material in the register maintained for Modvat purposes was only a book entry which might be utilised later for payment of excise....
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....f these decisions relate to the issue with which we are concerned. We are not informed that a later decision of the Supreme Court has taken a different view from Dai Ichi Karkaria Ltd. In view of the above, we are bound by the dictum laid down by the Suprme Court in Dai Ichi Karkaria Ltd. Since the issue is now covered directly by a decision of the Apex Court, we find it not necessary to place the matter before a Bench of 7 Members even though a Bench of 5 Members has taken a contra view in Khanbhai Esoofbhai. In case of CCE Vs. United Vanaspati Hon'ble P&H High court passed following order: 7. It is pertinent to mention here that the Apex Court in Collector of Central Exicse, Pune and others v. Dai Ichai Karkaria Ltd. and Others 1999 (112) E.L.T. 353 (S.C.) = 1999 (7) SCC 448 considered a similar question relating to the reversal of Modvat credit under Central Excise Rules, 1944. Rule 57H(5) of the said rules reads as follows :- "Where a manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been availing of the credit ....
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....tock or in process or contained final products lying in stock on the date when such option is exercised and after deducting the said amount from the balance, if any, lying in his credit, the balance if any, still remaining shall not be allowed to be utilized for payment of duty on excisable goods, whether cleared for home consumption or for export." 10. The language of Rule 57H(5) of the Excise Rules and Rule 9(2) of the Cenvat Rules is identical, therefore, the decision also has to be similar. 11. It would also be pertinent to mention here that the High Court of Kerala in Collector of Central Excise and Custom, Cochin v. Premier Tyres Ltd. - 2001 (130) E.L.T. 417 following the judgment of the Apex Court answered a similar question in favour of the assessee and against the Department. 12. It would also be pertinent to mention that the judgment of the Tribunal in Ashok Iron and Steel Fabricators' case has been upheld by the High Court of Rajasthan in Hindustan Zinc Ltd. v. Union of India, 2008 (223) E.L.T. 149. The High Court held as follows :- "It can be seen from yet another angle. In case inputs are received in factory and used in manufacture of end product. But the end prod....
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....s 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 acknowledgment 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 utilised, 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, therefore, indefeasible. It should also be noted that there is no corelation of the raw material and the final product: that is to say, it is not as if credit can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day th....