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2009 (12) TMI 170 - HC - Service TaxCenvat credit- Notification No. 16/96-CE, dated 23-7-1996- The assessee was engaged in manufacture of vegetable products and was taking credit of the duties paid on the inputs used in the manufacture of final products. The final product was exempted from payment of duty vide Notification No. 16/96-CE, dated 23-7-1996. Therefore, the notice was issued requiring the assessee to reverse the credit. Held that- We are in respectful agreement with the judgment of the Kerala and Rajasthan High Courts. Since the language of rule 9(2) of the Cenvat Credit Rules is identical to that of rule 57H(5) of the Excise Rules, we feel that the interpretation given by the Apex Court has to apply in the present case also and, therefore, even 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. Thus, the question is answered in favour of the assessee and against the revenue. The appeal is accordingly dismissed.
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