TMI Blog2016 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... ific provision exist therefor At the time opting area based exemption of Notification No.50/2003-CE dated 10.6.2003, the appellants are not required to reversed the credit in their cenvat credit account lying unutilized - appeal allowed - decided in favor of appellant. - Appeal No. E/933 & 1074/2007-Ex(DB) - FINAL ORDER NO. 61395-61396/2016 - Dated:- 19-9-2016 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri Rupender Singh, Advocate for the appellant Shri R.K. Sharma, AR the respondent PER: ASHOK JINDAL The appellants are in appeal against the impugned orders. 2. The brief facts of the case are that the appellants are engaged in the manufacture of telecommunication equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration is that whether the inputs lying in stock on the date on which exemption Notification No. 50/2003-CE dated 10.6.2003 exempted final product, the appellant is required to reverse the credit lying in their stock or not. 6. The issue came up before this Tribunal in the case of H.M.T. (supra) wherein the larger bench of this Tribunal has observed as under: 20. On perusal of the Rule 6 of Rules, 2002 and the corresponding Rules, as mentioned above, we are of the view that the Appellants had correctly taken the credit and utilised, when the final product was dutiable and there is no requirement to reverse the credit on final product becoming exempt and such credit cannot be recovered under Rule 12 of Rules 2002 corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Pune and others v. Dai Ichai Karkaria Ltd. and Others 1999 (112) EL.T. 353 (S.C.) = 1999 (7) SCC 448 considered a similar question relating to the reversal of Modvat credit under Central Excise Rules, 1944. Rule 57H(5) of the said rules reads as follows Where a manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been availing of the credit of the duty paid on inputs before such option is exercised, he shall be required to pay an amount equivalent to the credit, if any, allowed to him in respect of inputs lying in stock or used in any finished excisable goods lying in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available. 9. Rule 9(2) of the Cenvat Rules reads as follows A manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been taking of cenvat credit on inputs before such option is exercised, he shall be required to pay an amount equivalent to the cenvat credit, if any, allowed to him in respect of inputs lying in stock or in process or contained final products lying in stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in or in relation to which inputs are used is the date of its receipt in factory and condition is its actual use in or in relation to manufacture of end product by the manufacturer. The chargeability to duty or non-chargeability due to exemption or notified nil rate is to be considered at the stage before goods are actually produced, but on receipt of inputs intended to be used in manufacture of such goods. That being so ultimate clearance of goods at nil rate due to contingency existing at the time of removal does not affect the entitlement that legally arises long before that date. 13. 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 Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing substantial question of law was involved and assessee's similar plea accepted . Whether a manufacturer is required to reverse the Cenvat Credit taken by him in respect of inputs which are proved to have been used in the manufacture of goods which are exempted from excise duty in view of the provisions of Rule 6(1) of Cenvat Credit Rules, 2004 which provide that no credit can be taken in respect of inputs which are used in the manufacture of exempted goods, 11 . In the impugned order, the Appellate Authority has dealt with the aforesaid decisions by simply making the following observations: The Himachal High Court in CCE, Chandigarh v. M/s United Vanaspati Limited reported in 2009-TIOL-723 HP-CX and in CCE., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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