TMI Blog2011 (3) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... led 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 – Hence, 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 – Thus appeal is in favour of the assessee and against the revenue - CEA NO. 82 OF 2007 - - - Dated:- 1-3-2011 - N. KUMAR, RAVI MALIMATH, JJ. T.N. Venkata Reddy for the Appellant. Rajesh Chandra Kumar for the Respondent. JUDGMENT 1. This appeal is by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11A of the Central Excise Act, 1944 with interest and penalty. 3. The assessee objected to the said demand. However, overruling the said objection, the adjudicating authority passed an order confirming the recovery of Rs. 2,09,84,356. Aggrieved by the same, the assessee preferred an appeal to the Tribunal. The Tribunal relying on the judgment of the Apex Court in Collector of Central Excise v. Dai Ichi Karkaria Ltd. 1999 (112) ELT 353, (SC-CX) allowed the appeal and held that Cenvat credit need not be reversed if subsequently the final product is exempted from duty and when the credit has been taken legally. Aggrieved by the said order, the revenue is in appeal. 4. This Court while admitting the appeal on 17-9-2007 formulated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without an limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. It should also be noted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. 10. Therefore, the Tribunal was justified in interfering with the order passed by the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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