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TMI Blog2009 (12) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... cal 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. - 1 of 2006 - - - Dated:- 8-12-2009 - DEEPAK GUPTA AND V.K. AHUJA, JJ. Sandeep Sharma for the Appellant. Neeraj Gupta for the Respondent. JUDGMENT Deepak Gupta, J. - This appeal was admitted on the following substantial question of law:— "Whether the Modvat/Cenvat credit involved on the inputs, inputs in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h provided for recovery of such credit. It was further contended that rule 57C places a bar on taking credit of inputs used for the manufacture of final product exempted from duty. However, as per the assessee, this rule comes into operation only after the date when the final product is exempted and there was no legal provision requiring it to reverse the credit which it had taken prior to the date of the issuance of the exemption notification. The Assistant Commissioner did not accept the plea of the assessee and disallowed credit of Rs. 93,584. 5. The assessee filed an appeal and the Commissioner (Appeals) upheld the order of the Assistant Commissioner. Thereafter, the assessee approached the Customs, Excise Service Tax Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty on excisable goods, whether cleared for home consumption or for export." After considering the rule 57, the Apex Court held as follows:— "18. 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 an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the rules which provides for a reversal of the credit by the Excise Authorities except where it has been illegally or irregularly taken, in which event if stands cancelled or, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcisable goods, whether cleared for home consumption or for export." 9. The language of rule 57H(5) of the Excise Rules and rule 9(2) of the Cenvat Credit Rules is identical, therefore, the decision also has to be similar. 10. It would also be pertinent to mention here that the High Court of Kerala in Collector of CE C v. Premier Tyres Ltd. 2001 (130) ELT 417 following the judgment of the Apex Court answered a similar question in favour of the assessee and against the Department. 11. It would also be pertinent to mention that the judgment of the Tribunal in Ashok Iron and Steel Fabricators' case (supra) has been upheld by the High Court of Rajasthan in Hindustan Zinc Ltd. v. Union of India 2008 (223) ELT 149. The High Court held as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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