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TMI Blog2006 (2) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... i Karkaria [ 1999 (8) TMI 920 - SUPREME COURT] . Coming to the submission of the learned DR that assessee opting for exemption must fulfil the terms of the exemption, it is to be noted that exemption is in terms of notification issued from year to year and not in terms of Rule 9(2) of Cenvat Credit Rules. There is no reference or incorporation of the condition of Rule 9(2) in those notifications. That apart, Rule 9(2) cannot be interpreted in a manner as to undermine the indefeasibility of Modvat credit. A reading of the said rule would make it clear that what is required in terms of the rule is to determine the Cenvat credit taken on the inputs in stock and debit it from the credit balance, if any , lying in assessee s credit, and further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, upon changeover to payment of duty, Modvat credit is taken in respect of inputs. This cycle repeats annually. 3. Rule 9(2) of Cenvat Rules relates to changeover from duty paid clearances to exempt clearances. That Rule may be extracted : 9(2). A manufacturer who opts for exemption from 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 Cenvat credit, on inputs before such option is exercised, 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 in final products lying in stock on the date when such option is exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned DR's contention that since the rule specifically requires payment of an amount equal to the Cenvat credit, the assessee cannot opt for benefit of the exemption without fulfilling that requirement. Learned DR would also contend that it is well settled that any terms of a statutory provision cannot be read as redundant or superfluous [Grasim Industries Ltd. - 2002 (141) E.L.T. 593] and the Commissioner has deviated from this rule of interpretation in his order. Learned DR also relies on the judgment of the Hon ble Supreme Court in the case of State of Jharkhand v. Ambey Cement - 2004 (178) E.L.T. 55 (S.C.) in support of her contention that exemption provision in the statute is to be strictly interpreted and conditions of exemption ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where taking and utilization of credit are according to the provisions of Cenvat Credit Rules, no recovery can be effected under Rule 12. 7. Learned counsel also strongly relies on the judgment of the Apex Court in Dai Ichi Karkaria case and contends that Court has ruled in that case after considering all the provisions under Modvat Rules that the credit is indefeasible and once the credit was correctly utillised it cannot be called back. It is his submission that Larger Bench of this Tribunal considered the same issue in the case of Ashok Iron Steel Fabricators and relying on the decision of the Apex Court in the case of Dai Ichi Karkaria, held that credit once correctly utilised cannot be called back. 8. A perusal of the record makes it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d debit it from the credit balance, if any , lying in assessee s credit, and further credit balance, if any , lapsing and not recall of Modvat credit already utilised correctly. If the Rule contemplated additional cash payment on account of balance in Cenvat credit being insufficient, the Rule would not have qualified the credit balance as balance if any . The addition of those words make it clear that Cenvat credit balance alone is contemplated and no additional payment. An interpretation that requires additional payment if the balance in the credit account is not sufficient to meet debit of Cenvat credit on inputs in stock etc. would be to permit recall of Modvat credit correctly utilised. Such an interpretation goes against the scheme of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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