2009 (2) TMI 866 - AT - Central Excise

Summary

Issues involved: Determination of whether Cenvat credit is required to be recovered on inputs in stock, finished products, and work in process when final products become exempt under Rule 12 of the Cenvat Credit Rules.

Summary:
The appellants, engaged in tractor manufacturing, faced a dispute regarding the recovery of Cenvat credit on inputs, finished products, and work in process when final products were exempted under Rule 12. The Commissioner confirmed duty demand, interest, and penalty. The appellant cited a favorable decision by the Larger Bench in a previous case, while the DR relied on a Division Bench decision. The Tribunal referred to the decision in the case of M/s. HMT Ltd. & others, stating that the credit need not be reversed when the final product becomes exempt. The Tribunal also mentioned similar views upheld in other cases. Consequently, the impugned orders were set aside, and all appeals were allowed with consequential relief.