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TMI Blog2010 (5) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... finished goods. There is no one-to-one co-relation between the inputs and finished goods. In the absence of one-to-one co-relation, it is unjustified to ask the Assessee to reverse the credit which has already been utilized for the payment of finished goods. Thus the Assessee is not liable to pay duty equivalent to amount of Cenvat Credit availed on inputs and therefore question No. 1 is answered in favour of the appellant-assessee. As far as the second question of law is concerned, a perusal of the order passed by the Tribunal shows that it is a speaking order. Hence, this question is also decided against the Revenue - CEA No. 1 of 2008 - - - Dated:- 12-5-2010 - Ashutosh Mohunta and Mehinder Singh Sullar, JJ. Shri Jagmohan Bansal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such. There was credit balance of Rs. 4,68,858/- in the books of accounts of the Appellant and Appellant reversed the whole amount of credit. The Appellant further preferred an appeal before the Tribunal assailing the Order passed by Commissioner (Appeals). 4. The Tribunal vide its Order dated 9-3-2007, dismissed Appeal of the Appellant relying upon Single Member decision of the Tribunal in the case of Golden Polymex (India) Limited v. Commissioner of Central Excise, Patna, 2003 (160) E.L.T. 545 (Tri.-Kolkata). The Appellant has filed present Appeal against this Final Order of Tribunal. 5. The Counsel for the Appellant contended that as per Rule 57AB of the Central Excise Rules, as applicable during relevant period a manufacturer is en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Golden Polymex (India) Limited (supra). 7. We have heard arguments of both the ld. Counsels. We are of the considered opinion that this Appeal deserves to be allowed. Rule 49 of the Central Excise Rules, 1944 and Rule 21 of Central Excise Rules, 2001/2002 provide for remission of duty on goods destroyed. But there is no Rule providing reversal of credit in case of destruction of inputs. Credit on inputs is required to be reversed only if goods are used in the exempted goods. Hon ble Supreme Court in the case of Collector of Central Excise, Pune and Others v. Dai Ichi Karkaria Limited and Others, 1999 (112) E.L.T. 353 (S.C.) has held as follows : It is clear from these rules, as we read them, that a manufacturer obtains credit for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he inputs. Applying the same ratio and respectfully agreeing with the decisions of Himachal Pradesh High Court, Rajasthan High Court and Karnataka High Court, we are of the considered opinion that in the present case, the Assessee is not liable to pay duty equivalent to amount of Cenvat Credit availed on inputs and therefore question No. 1 is answered in favour of the appellant-assessee. 11. As far as the second question of law is concerned, a perusal of the order passed by the Tribunal shows that it is a speaking order. Hence, this question is also decided against the Revenue. 12. In view of above findings, the Questions of Law are answered in favour of the Appellant and against the Revenue. 13. Accordingly, the appeal is allowed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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