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TMI Blog2017 (1) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... t, therefore, the refund is to be given in cash whereas the Revenue is in appeal on the ground that the Commissioner (Appeals) erred in holding that the assessee is entitled for refund claim - Whether the assessee is entitled for cash refund or to be credited in Cenvat Credit Account? - Held that: - identical issue came up before the Hon’ble Uttarakhand High Court in the case of APCO Pharma Ltd. [2011 (10) TMI 38 - UTTARAKHAND HIGH COURT], where it was held that in a situation where the assessee is not in a position to utilize the Cenvat Credit Account, the refund claim is to be given in cash. Therefore, we hold that the assessee is entitled for refund claim of the amount paid by the assessee on account of reversal of credit in cash. Appeal dismissed - decided against Revenue. - E/400/2012-Ex (DB), E/569/2012-Ex (DB) - A/60042-60043/2017-EX[DB] - Dated:- 2-1-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri R.k.Sharma, AR for the appellant and vice versa Shri Naveen Mullick, Advocate for the respondent and vice versa ORDER Per Ashok Jindal Both sides are in appeal against the impugned order. 2. The facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT 519 (HP) wherein Hon ble High Court has observed as under: 12. We are in respectful agreement with the judgment of the Kerala and Rajasthan High Courts. Since the language of Rule 9(2) of the Cenvat Rules is identical to that of Rule 57H(5) of the Excise Rules, we feel that the interpretation given by the Apex Court has to apply in the present case also and, therefore, even though the final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. 6. Further in the case of Gokaldas Intimate Wear-2011 (270) ELT 351 (Kar.) wherein the Hon ble Karnataka High Court has observed as under: 4. This Court in the case of the Commissioner Central Excise v. M/s. TAFE Limited (Tractor Division) disposed off on 1st March 2011 [2011 (268) E.L.T. 49 (Kar.)] after referring to the various judgments held that once the input credit is legally taken and utilized on the duitable 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 product is exempted from p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. 7. Further the larger bench of this Tribunal in the case of HMT -2008 (232) ELT 217 (Tri.-LB) has observed as under: 20. On perusal of the Rule 6 of Rules 2002 and the corresponding Rules, as mentioned above, we are of the view that the Appellants had correctly taken the credit and utilised, when the final product was dutiable and there is no requirement to reverse the credit on final product becoming exempt and such credit cannot be recovered under Rule 12 of Rules 2002 corresponding to Rule 57-I, 57AH of Rules 1944. 21. We find that the different benches of the Tribunal have taken the similar view in the cases of C.N.C. Commercial Ltd. (supra) upheld by the High Court, Saboo Alloys Pvt. Ltd. (supra), Swastik Textile Engineers Ltd. (supra) and P.S.L. Ltd. (supra) . We agree with the views expressed in the said decisions. 22. 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. 9-7-2004. The decision of the Bangalore Bench in the case of TAFE Ltd. (Tractor Division) v. CCE, Bangalore - 2007 (210) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngalore Bench in the case of TAFE Ltd. (Tractor Division) v. CCE, Bangalore - 2007 (210) E.L.T. 571 (Tri.) = 2007 (79) RLT 706 (Tribunal-Bangalore) enunciated the correct position of the law. The issue is thus, answered in favour of the assessee and against the Revenue. 23. Before we part, we observe that this order is passed without going into the submission of the Id. Advocate that the Notification No. 10/2007-C.E. (N.T.), dated 1-3-2007 inserted sub-rule (3) to Rule 11 of Rules 2004, is a specific provision for reversal of credit because such issue was not in the referral order. 7. The said issue also came up before the Hon ble High Court of Himachal Pradesh in the case of United Vanaspati Ltd.(supra) wherein the Hon ble High Court of Himachal Pradesh has observed as under: 7. It is pertinent to mention here that the Apex Court in Collector of Central Exicse, Pune and others v. Dai Ichai Karkaria Ltd. and Others 1999 (112) E.L.T. 353 (S.C.) = 1999 (7) SCC 448 considered a similar question relating to the reversal of Modvat credit under Central Excise Rules, 1944. Rule 57H(5) of the said rules reads as follows :- Where a manufacturer who opts for exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial year, and who has been taking of cenvat credit on inputs before such option is exercised, he shall be required to pay an amount equivalent to the cenvat credit, if any, allowed to him in respect of inputs lying in stock or in process or contained final products lying in stock on the date when such option is exercised and after deducting the said amount from the balance, if any, lying in his credit, the balance if any, still remaining shall not be allowed to be utilized for payment of duty on excisable goods, whether cleared for home consumption or for export. 10. The language of Rule 57H(5) of the Excise Rules and Rule 9(2) of the Cenvat Rules is identical, therefore, the decision also has to be similar. 11. It would also be pertinent to mention here that the High Court of Kerala in Collector of Central Excise and Custom, Cochin v. Premier Tyres Ltd. - 2001 (130) E.L.T. 417 following the judgment of the Apex Court answered a similar question in favour of the assessee and against the Department. 12. It would also be pertinent to mention that the judgment of the Tribunal in Ashok Iron and Steel Fabricators case has been upheld by the High Court of Rajasthan in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even though final product may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. The substantial question of law was answered in favour of assessee as against the Revenue. 10. Subsequently, the very same view stands reiterated by another Division Bench of this Court in Saboo Alloys Pvt. Ltd. (supra), wherein also the following substantial question of law was involved and assessee s similar plea accepted :- Whether a manufacturer is required to reverse the Cenvat Credit taken by him in respect of inputs which are proved to have been used in the manufacture of goods which are exempted from excise duty in view of the provisions of Rule 6(1) of Cenvat Credit Rules, 2004 which provide that no credit can be taken in respect of inputs which are used in the manufacture of exempted goods. 11. In the impugned order, the Appellate Authority has dealt with the aforesaid decisions by simply making the following observations:- The Himachal High Court in CCE, Chandigarh v. M/s United Vanaspati Limited reported in 2009-TIOL-723 HP-CX and in CCE., Chandigarh v. Saboo Alloys Private Limited, reported in 2010 (249 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where there is no provision to grant refund claim in the Cenvat Credit Account. We further find that identical issue came up before the Hon ble Uttarakhand High Court in the case of APCO Pharma Ltd.-2015 (319) ELT 641 (Uttarakhand) wherein the Hon ble High Court has observed as under: These three appeals involve the same question of law and are being decided together. For facility, the facts of M/s. Apco Pharma Ltd. is being taken into consideration. The facts leading to the filing of the present appeal is, that the assessee M/s. Apco Pharma Ltd. is a manufacturer of medicines and the final product manufactured by them was exigible to excise duty. The assessee was availing Cenvat credit on inputs purchased by them under the Cenvat Credit Rules, 2002 (hereinafter referred to as the Rules ). The Central Excise Department issued a Central Excise Notification No. 50/2003, dated 10th June, 2003, pursuant to which, the assessee undertook an expansion programme and became eligible for exemption of excise duty on the final product manufactured by them. The assessee opted to avail nil rate of duty with effect from 8th April, 2004 under the said Notification No. 50/2003. At that stage, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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