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2014 (12) TMI 905 - HC - Central ExciseReversal of cenvat credit after finished goods become exempted goods - Demand of CENVAT Credit on inputs lying in stock and inputs contained in finished goods lying in stock - Tribunal followed decision of Albert David Ltd. v. CCE [2002 (11) TMI 144 - CEGAT, COURT NO. III, NEW DELHI] - Held that:- Assuming for the moment that the credit is available, it can be used for payment of duty on any other excisable articles and not exempted goods. In such view of the matter, we are not agreeable with the view taken by the Allahabad High Court that it will amount to unjust enrichment. We also notice that the decision in Super Cassettes Industries Ltd case, referred [1997 (1) TMI 98 - HIGH COURT OF JUDICATURE AT ALLAHABAD], which has been relied upon by the Division Bench in Brook Bond Lipton India Ltd. Case, referred [2011 (8) TMI 593 - Allahabad High Court], did not find favour with the Supreme Court in Dai Ichi Karkaria Ltd. Case, referred [1999 (8) TMI 920 - SUPREME COURT OF INDIA]. In such view of the matter, it has to be held that the view taken by the Allahabad High Court has not been accepted by the Supreme Court. - Tribunal in Ashok Iron and Steel Fabricators case, referred [2002 (1) TMI 91 - CEGAT, NEW DELHI] as well as the decision of the Bangalore Bench of the Tribunal in the assessee's own case have emphasised over and over again on para (17) of the decision of in Dai Ichi Karkaria Ltd. Case, referred [1999 (8) TMI 920 - SUPREME COURT OF INDIA], which has very clearly set out the position as to how the credit taken on inputs should be utilized. Once it is held that no co-relation between the raw material and the final product is required, the appellant's plea stands answered. If credit can be taken against excise duty on a final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken credit need not be reversed. The Central Excise Rules would come into play in the following manner, that is to say, on the date when the final goods become exempt from payment of duty, for the inputs received on and after the said date, no credit can be taken. This would be the correct method of understanding of the position of law. The introduction of Rule 11(3) of the Cenvat Credit Rules, 2004, by notification No.10/2007-CE (NT), dated 1.3.2007 and the Tax Research Unit Circular in D.O.F.No.334/1/2007-TRU, dated 28.2.2007 clarifying that it will come into effect immediately, makes it clear that the position of law as it stood decided in the assessee's own case by the Karnakata High Court, the appeal against which was dismissed by the Supreme Court, is the correct position. The Tribunal in this case erred in distinguishing the decision of the Bangalore Bench Tribunal placing reliance on Albert David Ltd. case, referred supra. In any event, Ashok Iron and Steel Fabricators case, referred [2002 (1) TMI 91 - CEGAT, NEW DELHI], is a Larger Bench decision and the same has been upheld by the Supreme Court and that would be binding on the Tribunal, rather than the Two-Member Bench decision in Albert David Ltd. Case, referred [2002 (11) TMI 144 - CEGAT, COURT NO. III, NEW DELHI]. - Decided in favour of assesse.
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