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2016 (10) TMI 759 - AT - Central ExciseModvat credit - whether the appellant is required to reverse the Modvat credit in respect of input lying in the stock on the date when the final product became exempted by the Notification No. 15/96 dated 22/7/1996 from whole of duty during the period? – Held that: - at the relevant time i.e 22/7/1996 when the final product namely Vanaspati was exempted, there was no provision for reversal of Cenvat credit on the stock of input lying as on date on which exempted notification was issued. The specific provision was introduced under Rule 11(3) of Cenvat Credit Rules, 2004 w.e.f. 1/3/2007 only. That specific provision was brought in the statute which clearly shows that for the previous period there was no requirement of reversal of credit on the input. When the credit was availed, final product was dutiable and subsequently got exempted. Reliance placed in the decision of Ashok Iron & Steel Fabricators Vs. CCE [2002 (1) TMI 91 - CEGAT, NEW DELHI]where it was held that Modvat credit need not to be reversed on the stock of input lying in stock when the final product became exempted. As regard the specific provision brought under Rule 11(3) of Cenvat Credit Rules, 2004, the same was observed by the Hon’ble Madras High Court in case of Tractor and Farm Equipment Ltd Vs. CCE [2016 (1) TMI 1006 - SUPREME COURT] wherein it was held that The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available. Reversal of Modvat credit not justified – appeal allowed – decided in favor of appellant.
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