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TMI Blog2016 (3) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on final product at the time of clearances from the factory. The final product namely cotton fabric is exempted from payment of duty by Notification No. 30/2004-CE dated 9.7.2004. The demand of duty is on stock of inputs as such, in semi finished and finished products as on 9.7.2004, the Revenue sought to demand Cenvat credit relating to such inputs on the ground that the final products were exempted. The appellants have utilized the entire credit in the Cenvat Credit account, paid the amount so demanded by the Department by Challan No. 5 dated 18.8.2004 and Challan No. 6 dated 07.9.2004. Subsequently, on realization of the fact that they need not to have paid such Cenvat credit, they filed refund claim. The refund claim was sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in the case of Commissioner of Central Excise Vs. Dai Ichi Karkaria Ltd. [1999 (112) E.L.T. 353]. He also took us through the various provisions of the Modvat / Cenvat Credit Rules. 4. The learned A.R. on the other hand submits that the Notification No. 30/2004-CE dated 09.7.2004 was a conditional notification and was depending upon the condition of non-availment of the Cenvat Credit. It is the submission that all the judgements cited by the learned counsel are in respect of the exemption notification which granted unconditional exemption and hence, the ratio will not apply. He submits that the judgment of the Tribunal in the case of Albert David Ltd. (supra) would directly apply which was in respect of the demand of inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had taken Cenvat credit. In the case in hand, the issue is not the demand of duty or the reversal of Cenvat credit but refund of amount which was paid under misunderstanding of the law by the appellant. 8. We find that the Hon'ble High Court of Karnataka in the case of TAFE Ltd. (supra) has considered the very same issue. In that case, the issue was regarding the reversal of Cenvat credit of the inputs lying in stock, in WIP and final products whether needs to be reversed when final products are exempted from payment of duty. Their Lordship while deciding the issue held as under : "6. Dealing with Cenvat credit and reversal of said credit, the Apex Court in the case of Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd. repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motors Ltd. v. Union of India [1999 (106) E.L.T. 3] this Court said that a credit under the Modvat scheme was as good as tax paid." 7. There is no provision in the modvat rules which provides for a reversal of the credit by the Excise authorities where it has been illegally and irregularly taken, in which event it stands cancelled or if utilised, has to be paid for. 8. xxx xxx xxx 9. Therefore it is clear from the aforesaid judgment of the Apex Court that once the input credit is legally taken and utilized on the dutiable final product, it need not be reversed on the final product being exempted subsequently. Only if any products are purchased subsequent to the said exemption and if any tax is paid on such inputs, as the final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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