TMI Blog2024 (2) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... ds - demand of differential duty in respect of the partially exempted goods, i.e. normal rate of duty less 1% or 2% Excise Duty already paid by the Appellant - HELD THAT:- The issue is squarely covered by the case law of HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [ 2004 (7) TMI 98 - ALLAHABAD HIGH COURT] , wherein it has been held reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence the benefit has to be given of the notification granting exemption/rate of duty on the final product since the reversal of the credit on the input was done at the Tribunal s stage. Prior to this, the Hon ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [ 1995 (12) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER R. MURALIDHAR : The Appellant is manufacturer of dutiable goods and conditionally/partially exempted goods @ 1%/2% against the normal rate. As per them, they were maintaining separate records for receipt of inputs and they were taking the Cenvat Credit only in respect of the dutiable goods. In respect of the partially duty exempted goods, they were not eligible to take the Cenvat Credit for input and input services. As they were not in a position to properly bifurcate the input services, they have taken the Cenvat Credit towards the entire input services received. They have reversed the proportionate Cenvat Credit in respect of the input service used in the manufacture of partially exempted goods. The Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and case laws placed before us, we find that the issue is squarely covered by the case law of Hello Mineral Water (P) Ltd. Vs. UOI-2004 (174) ELT 422 (All), wherein it has been held as under:- 17. The question as to whether manufacturer can be treated as not having taken credit on the inputs used in the manufacture of final product, even though it was originally taken but subsequently reversed, has been decided by a five Member Bench of the Tribunal in the case of Franco Italian Company Pvt. v. CCE, 2000 (120) E.L.T. 792. The aforesaid five members Bench of the Tribunal after taking into account the ratio laid down by the Supreme Court in the case of Chandrapur Magnet Wire (P) Ltd. v. CC, Nagpur, 1996 (81) E.L.T. 3 has held as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner, even though after clearance of the final product. [Emphasis supplied] 7. Prior to this, the Hon ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. Vs. Collector of C. Excise, Nagpur-1996 (81) E.L.T. 3 (S.C.) has held as under:- 6. It is true that the assessee has not maintained separate accounts or segregated the inputs utilised for manufacture of dutiable goods and duty free goods, as should have been done. The contention of the Department that in this situation, the assessee is not entitled to reverse the entries and get the benefit of the tax exemption is a question which merits serious consideration. There is no doubt that the assessee should have maintained separate accounts for duty free goods and the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e removal of the exempted final products. 7. In view of the aforesaid clarification by the Department, we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. In other words, the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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