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TMI Blog2008 (9) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Rama Subramanian, learned Chartered Accountant for the respondents. 3. We heard both sides. 4. The respondents are manufacturers of ice-cream which are excisable. However, with effect from 1-3-2006 vide Notification No. 3/2006-C.E., dated 1-3-2006 they were exempted. Prior to the issue of Notification, they were availing Cenvat credit on inputs used in the manufacture of ice-cream. Consequent to the issue of the Notification, they were required to reverse the Cenvat credit taken on raw materials lying in stock and also on inputs which were contained in the final products, which is produced and not cleared or which is in process, as on 1-3-2006. The respondents were having certain balances in the Profit and Loss Account (PLA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions. The facts of the case are not in dispute. The appellants' final product was wholly exempt from duty w.e.f. 9-7-2004. Admittedly, whatever inputs lying as such in stock on that date were subsequently used in the manufacture of exempted final product and, therefore, the appellants were prohibited by Rule 6 of the CCR from taking credit of the duty paid on such inputs. Before the advent of Rule 6, such prohibitive provision was available under Rule 57AD of the erstwhile Central Excise Rules, 1944. Prior to the coming into force of Rule 57AD, Rule 57C had held the field. The provisions of Rule 57C were no different from the successor-Rule 57AD. These rules mandated that no credit of duty paid on input would be allowed if the final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very day that it becomes available." 7. It was from the above paragraph of the Apex Court's judgment that the Tribunal's Larger Bench, in the case of Ashok Iron & Steel Fabricators (supra), took the view that, if credit was taken at the time when the final product was not exempted from duty and it was utilized, subsequent exemption of the final product would not be a reason for reversal of the credit. The S.L.P filed by the department against the decision in Ashok Iron & Steel Fabricators (supra) was dismissed by the Apex Court. On the other hand, the contra view taken by a Two-Member Bench of the Tribunal in the case of Albert David Ltd. (supra) after distinguishing the case of Ashok Iron & Steel Fabricators (supra) stood affirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilized, has to be paid for. Thus the Hon'ble Supreme Court's judgment provides room for reversal of credit illegally or irregularly taken as also for recovery of credit if already utilized. In the appellants' own case, the Bangalore Bench of the Tribunal held, on a similar set of facts, that the decision in Albert David was per incuriam. With great respect, we are unable to agree with such an observation. We are of the considered view that the Tribunal's decision in Albert David case, affirmed by the Apex Court, requires to be followed in the present case and, accordingly, we hold that the credit tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;The learned Chartered Accountant who appeared on behalf of the respondents brought to our notice the decisions of this Bench on a similar issue. The citation is CCE, Tirupati v. Venugopal Fruit Processed Industries Ltd. - 2006 (201) E.L.T. 299 (Tri.-Bang.). 7. The learned departmental representative reiterated the grounds of appeal. 8. On a very careful consideration of the issue, we find that this Bench had already taken a view in some of the decisions that once input credit is taken legally, then the same cannot be denied after the issue of exemption notification on the final products. We do not want to differ from such a view at this stage. If the ratio of this decision is applied, they would not be any necessity to withhold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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