TMI Blog2017 (5) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is in appeal against the impugned order wherein they have been denied cash refund of the amount of Cenvat credit paid through PLA and Cenvat account, under protest. 2. The facts of the case are that the appellant is manufacturing LPG Cylinders and with effect from 28.11.2003, the appellant opted for the benefit of exemption Notification No. 50/2003 dated 10.06.2003, being located in the state of Himachal Pradesh. For the said period, the Revenue insisted the appellant to reverse the credit lying unutilised and to pay the Cenvat credit on inputs contained in the goods on work-in-progress and in the finished goods lying in their stock, on the date of opting for the exemption notification. The appellant paid the amount under protest through PLA and by reversal to Cenvat credit but later-on filed refund claim of the said amount as they were not required to pay the said amount. The adjudicating authority rejected the refund claim holding that they are required to reverse the Cenvat credit contained in input in progress for finished goods lying in stock. The said order was challenged before the ld. Commissioner (Appeals), who allowed the refund claim but the same was credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny 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. Therefore, the judgment in the aforesaid case squarely applies to the case on hand and the Tribunal was justified in granting benefit. 5. It was pointed out to us that in the year 2008 (sic) sub-rule (3) was inserted by a Notification No. 10/2007 with effect from 1-3-2007, which reads as under :- (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. 9-7-2004. The decision of the Bangalore Bench in the case of TAFE Ltd. (Tractor Division) v. CCE, Bangalore - 2007 (210) E.L.T. 571 (Tri.) = 2007 (79) RLT 706 (Tribunal-Bangalore) enunciated the correct position of the law. The issue is thus, answered in favour of the assessee and against the Reven ue 8. Further in the case of Ranbaxy Laboratories Ltd. -2012 (279) ELT 194 (HP), the Hon ble Himachal High Court has further observed as under: 14. We are in respectful agreement with the judgment of the Kerala [2001 (130) E.L.T. 417 (Ker.)] and Rajasthan High Courts. Since the language of Rule 9(2) of the Cenvat 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. 9. Further in the case of Himachal Futuristic Communications Ltd. vide Final Order No.61395-61396/2016-EX (DB) dated 19.9.2016 wherein this Tribunal has observed as under: 5. We find that the sole question for consideration is that whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 stock on the date when such option is exercised and after deducting the said amount from the said amount from the balance, if any, lying in his credit, the balance, if any, still remains shall lapse and shall not be allowed to be utilized for payment of duty on excisable goods, whether cleared for home consumption or for export. 8. After considering the Rule 57, the Apex Court held as follows :- It is clear from these rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in Ashok Iron and Steel Fabricators case has been upheld by the High Court of Rajasthan in Hindustan Zinc Ltd. v. Union of India, 2008 (223) E.L.T. 149. The High Court held as follows :- It can be seen from yet another angle. In case inputs are received in factory and used in manufacture of end product. But the end product is destroyed by fire before stage of its removal from factory premise. In such circumstances, no excise duty becomes payable on end product. Yet Modvat credit availed on inputs used in destroyed goods is not to be recalled. This is also suggestive of the fact the relevant date for considering exemption from duty of the end product 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 2009-TIOL-723 HP-CX and in CCE., Chandigarh v. Saboo Alloys Private Limited, reported in 2010 (249) E.L.T. 519, merely followed the decision of the Rajasthan High Court in Hindustan Zinc Limited. In Purval and Associates (supra) the Tribunal merely followed the decision of Hindustan Zinc Limited and in P.A. precision Components, the decision in Purval and Associates was followed without considering all the points which are considered herein. 12. We are of the considered view that the Appellate Authority has failed to appreciate the ratio of law laid down by this Court in its right perspective. The decisions have been brushed aside and dealt with in a cryptic and perfunctory manner. On this aspect we refrain from saying anything further. It is not that the earlier view taken by this Court merely based upon the decisions rendered by the High Court of Rajasthan [2008 (223) E.L.T. 149 (Raj.)]. In fact this Court, while deciding the aforesaid appeals, took into account not only the relevant provisions of law but also the decisions rendered by various High Courts as also the Apex Court in Excise, Pune and Others v. Dai-Ichi Karkaria Ltd. and Others, 1999 (112) E.L.T. 353 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nil rate of duty with effect from 8th April, 2004 under the said Notification No. 50/2003. At that stage, the assessee had already availed Cenvat credit under the Rules, amounting to ₹ 4,78,260/- on inputs/work in progress/finished goods. The Superintendent, Central Excise, Range Haridwar, directed the assessee that since they are opting to avail exemption on the final product under the Central Excise Notification No. 50/2003, they cannot be given Cenvat credit on the raw materials/inputs and that the said Cenvat credit taken by them has to be reversed. Accordingly, on the direction of the Superintendent, the Cenvat credit was reversed by the Department. 2. On 4th July, 2005, the assessee filed an application for the refund of the duty contending that Cenvat credit was validly availed by them and the same could not be reversed by the Department. Instead of refunding the amount, the Department directed the assessee to show cause as to why the refund claimed by them should not be disallowed. And further considering the contention of the Hon ble High Court has observed as under: 20. Upon hearing the learned Counsel, the Court finds that 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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