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2012 (4) TMI 369 - HC - Central ExciseWhether the Modvat/Cenvat credit on the inputs in process and in finished products is liable to be reversed/paid back when the final product becomes exempt from payment of duty - Appellants took cenvat credit on inputs procured prior to 10.1.2005 and out of the inputs procured some stock were lying with them – AO stated that assessee with respect to these inputs did not reverse the proportionate cenvat credit since at the time when these inputs were procured, cenvat credit was validly taken and utilized – Held that:- Since the language of Rule 9(2) of the Cenvat Rules is identical to that of Rule 57H(5) of the Excise Rules, the interpretation given by the Apex Court has to apply in the present case stating that 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 – on the date when they paid the tax on the raw materials or the inputs, that right would continue until the facility available thereto gets worked out or until those goods existed - decided in case Collector of Central Excise, Pune and others vs. Dai Karkaria Ltd. and others (1999 - TMI - 94220 - CEGAT, NEW DELHI) – in favour of assessee.
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