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TMI Blog2010 (4) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... the inputs in manufacture of final goods and validly availed the Cenvat credit. Therefore, the same cannot be reversed on the ground that the final product (i.e. agricultural Tractors) were subsequently exempted from tax - the assessee is held entitled to the benefit of Cenvat credit - appeal dismissed - decided against Revenue. - C.E.A. Appeal No. 78 of 2009 & C.E.A. Appeal No. 100 of 2008 - - - Dated:- 5-4-2010 - Ashutosh Mohunta and Mehinder Singh Sullar, JJ H.P.S. Ghuman, Sr. Standing Counsel for CEA No. 78 of 2009, Sukhdev Sharma, Sr. Standing Counsel for CEA No. 100 of 2008 for the Appellant M.P. Devnath, Adv., for CEA No. 78 of 2009 for the Respondent JUDGEMENT Mehinder Singh Sullar: As common questions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they were manufacturing 28 models of tractors in their factory; that the benefit of exemption on their finished goods under Notification No.23/2004-CE was only in respect of excise duty payable under first and second schedule to Central Excise Tariff Act, 1985; that out of 28 models of tractors, they were manufacturing 23 models of capacity exceeding 1800cc on which they were also paying Automobile Cess @ 0.125% since 9th July, 2004 and hence, the tractors of capacity exceeding 1800cc could not be considered as exempted goods that they were also paying Education Cess @ 2% on Automobile Cess since 9th July 2004 that Automobile. Cess had its origins under Section 30 of the Industrial (Development and Regulation) Act, 1951 (IDRA) under which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts, need not be reversed on the final product becoming exempt subsequently and the matter was placed before the Regular Bench for final decision vide order dated 24.10.2008 (Annexure A/3). 8. The Customs, Excise and Service Tax Appellate Tribunal relying upon the following observations of the Larger Bench accepted the appeal of the assessee vide order dated 12.12.2008 (Annexure A/4):- In view of the above discussions, we hold that when the input-credit legally taken and utilised on the dutiable final products, need not be reversed on the final product becoming exempt subsequently w.e.f. 09.07.2004. The decision of the Bangalore Bench in the case of TAFE Ltd. (Tractor Division) V. CCE, Bangalore - 2007 (210) E.L.T. 571 (Tri.) = 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versed and no interference is warranted in the connection. In support of his contention, he has placed reliance upon the judgments of the Hon'ble Apex Court in cases Collector of Central Excise, Pune vs. Dai Ichi Karkaria Ltd. 1999 (112) ELT 353 (SC). Commissioner of Central Excise Versus Life Long Appliances Ltd., 2006 (196) E.L.T. A144 (S.C.) and Chandrapur Magnet Wires (P) Ltd. Versus Collector of Central Excise. Nagpur. 1996 (81) E.L.T, 3 (S.C.), a Division Bench judgment of this Court in case Commissioner of Central Excise, Chandigarh Versus C.N.C. Commercial LTD., 2008(224) E.L.T. 239 (P and H), and a judgment of the Larger Bench of the Tribunal between the parties reported in case H.M.T. Versus Commissioner of Central Excise, Pan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product; that is to say, it is not as if credit can be taken only on a final product that is Manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available and the credit under the Modvat scheme was as good as tax paid. The same view was reiterated by this Court in C.N.C. Commercial Ltd's case(supra). 15. Sequelly, in case Commissioner of Central Excise, Rajkot Versus Ashok Iron and Steel Fabricators, 2002(140) E.L.T. 277 (Tri.-LB), the Larger Bench of the Tribunal has held that once the manufacturer had availed the credit and utilised the same during the period when final products dutiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations of the aforesaid judgments mutatis mutandis are applicable to the present controversy. 18. This is not the end of the matter. In pursuance of the law laid in Chandrapur Magnet Wires (P) Ltd.'s case (supra) the Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, Government of India issued Circular No.232/66/96-CX dated 25.7.1996 and clarified that the credit of the duty paid on common inputs is admissible when used in the manufacture of the final product (exempted and dutiable) provided the said credit of duty paid on inputs going into the exempted category of the final product is debited in the RG 23A Part-II account before the removal of exempted final product on actual or pro rata (estimated) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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