2017 (11) TMI 752

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....an Sugar and Molasses under chapter 17. During the impugned period, the appellant purchased certain capital goods for efficiency programme and expansion programme which was completed by 25.10.2004 and availed Cenvat Credit on the said capital goods and utilized it for the payment of Excise duty on the final product. The Department alleged that the credit availed on capital goods procured during the impugned period was inadmissible as these have been exclusively used for the manufacture of exempted goods and as such is required to be recovered. Hence duty was demanded and equivalent amount of penalty was also imposed. Being aggrieved, the appellant filed the present appeal. 3. With the above background, we have heard Ms. Rinky Arora, Advo....

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....ed 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 duty on the excisable product. In other words, it matured when the excisable product was removed from the factory and the stage for payment of excise duty thereon was reached. This argument did not find favour with the Apex Court. The nature of the....

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....g to the Modvat Scheme that availing of Modvat credit was not irrevocable and when subsequently the end product was exempted from duty the entry has to be reversed even if the credit has been utilised by the time. He placed reliance on the following decisions of the Supreme Court in- (1) CCE, Meerut v. Modi Rubber Ltd. [2001 (133) E.L.T. 515 (S.C.)] (2) CCE, Jaipur v. Raghuvar (India) Ltd. [2000 (118) E.L.T. 311 (S.C.) = 2000 (38) RLT 777 (S.C.)] (3) Chandrapur Magnet Wires (P) Ltd. [1996 (81) E.L.T. 3 (S.C.)] (4) CCE, Vadodara v. Dhiren Chemical Industries [2002 (139) E.L.T. 3 (S.C.)] and took us through those decisions. We find that none of these decisions relate to the issue with which we are concerned. We are not informed....