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2016 (3) TMI 897 - CESTAT BANGALORERefund claim - reversal of cenvat credit - amount paid by the appellants under misunderstanding of the law - Demand Cenvat credit as final products were exempted - Held that:- There is no provision in the modvat rules which provides for a reversal of the credit by the Excise authorities where it has been illegally and irregularly taken, in which event it stands cancelled or if utilised, has to be paid for. Once the input credit is legally taken and utilized on the dutiable final product, it need not be reversed on the final product being exempted subsequently. Only if any products are purchased subsequent to the said exemption and if any tax is paid on such inputs, as the final product is exempted from payment of tax, the assessee would not be entitled to avail the Cenvat credit on such inputs. But the Cenvat credit availed on such inputs till the date of exemption, they vest in the assessee and the assessee cannot be divested of that credit as the law does not provide for the same. Therefore the authorities taking advantage of the notification exempting the final product cannot claim reversal of Cenvat credit either in respect of final product which have come into existence on the date of the notification or on the inputs stored in the godown or the work in progress and finished products. See Tafe Ltd. (Tractor Division) [ 2011 (3) TMI 67 - KARNATAKA HIGH COURT ] upheld by SC [ 2011 (9) TMI 952 - SUPREME COURT ] - Decided in favour of assessee
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