2005 (12) TMI 27

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..... fruit pulp/concentrate, an excisable commodity. W.e.f. 25-7-1991, the goods were exempted. The respondents were availing Cenvat credit in respect of the inputs/packing material. Revenue proceeded against the respondents for reversal of the Cenvat credit utilized irregularly as the final products were exempted from payment of duty w.e.f. 25-7- 1991. The respondents relied on the following decisions: (i) CCE, Bangalore v. Wipro Information Technology - 1988 (33) E.L.T. 172 (Tri.) (ii) CCE, v. Sri Sarvaraya Sugar Bottling Limited - 1992 (59) E.L.T. 125 (Tri.) (iii) CCE, Rajkot v. Ashok Iron and Steel Fabricators - 2002 (140) E.L.T. 277 (Tri.- LB) 3. The original authority accepted the contentions of the respondents and dropped the proc .....

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..... ng as on the date of the exemption and to be specific, the credit involved on such inputs which was already utilized. It is to be noted that the Apex Court affirmed the decision in the case of Albert David Ltd. v. CCE, Meerut as reported in 2003 (158) E.L.T. A273 (S.C.) wherein the demand for reversal of credit on inputs lying in stock was upheld. Two contra opinions have been arrived by the Apex Court on similar issues. Hence the issue of allowing the credit on inputs for the manufacture of exempted product has not reached any finality and needs to be appealed against. (vi) Apart from credit involved in the inputs lying in stock, the credit involved in the inputs contained in the finished products also should be reversed in the light of .....

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..... 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 it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. It should also be rioted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit can be taken only on a final product that is manufacture .....

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