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TMI Blog2017 (3) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... notification granting exemption/rate of duty on the final product since the reversal of the credit on the input was done at the Tribunal’s stage. The Ld. AR, has pointed out that in the case of SEZ the condition has to be complied being mandatory. However, the Ld. AR, has not been able to convince as to how the said condition which is similar in all the notifications discussed in the case laws would stand on a different footing. Rejection of refund is unjustified - appeal allowed - decided in favor of appellant. - ST/20988/2014 - A/30110/2017 - Dated:- 31-1-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri. Karan Talwar C. Sumanth, Advocates for the Appellant. Shri. Nagraj Naik, Deputy Commissioner (AR) for the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant, the Cd. Counsel Shri. Karan Talwar, submitted that the refund has been rejected for the reason that the appellant has violated condition No. 2(g) provided in the Notification No. 17/2011-ST. The appellant had availed CENVAT credit amounting to ₹ 34,80,474/- out of which an amount of ₹ 14,34,469/- had been utilized for payment of service tax on output services. Thus on 31.03.2012 there was a unutilized credit balance of ₹ 20,46,005/-. The appellant continued to take credit of service tax paid on input services and during the period April, 2012 to June, 2012 an amount of ₹ 24,42,467/- was taken has credit. That thereafter, on realizing that the amount of credit taken is much higher than the requirement for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad, was relied by the appellant to content that the refund claim has been rejected without proper appreciation of law. 5. Against this the Ld. AR, Shri. Nagraj Naik submitted that the Notification No. 17/2011-ST stipulates a condition in clause 2(g) that no CENVAT credit of service tax paid on the specified service used in the authorized operations in a SEZ can be taken by the assessee. The appellant having violated this condition, the refund has been rightly rejected. That the citations relied upon by the Counsel for appellant relates to other notifications and also that the said case laws do not deal with the situation of a SEZ unit. Since the appellants have violated the condition in the notification even if the CENVAT credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerals Water (P) Ltd. (supra) is as under : 17. The question as to whether manufacturer can be treated as not having taken credit on the inputs used in the manufacture of final product, even though it was originally taken but subsequently reversed, has been decided by a five Member Bench of the Tribunal in the case of Franco Italian Company Pvt. v. CCE, 2000 (120) E.L.T. 792. The aforesaid five members Bench of the Tribunal after taking into account the ratio laid down by the Supreme Court in the case of Chandrapur Magnet Wire (P) Ltd. v. CC, Nagpur, 1996 (81) E.L.T. 3 has held as under :- 6. Drawing similar analogy we consider that subject to the reversal of Modvat credit taken with regard to the inputs which were utilised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as far as the aforesaid two judgments are concerned, they were accepted by the Department and no appeal was filed thereagainst. In the impugned judgment, the Tribunal has decided the issue in favour of the assessee relying upon the aforesaid two decisions. 8. The Ld. AR, has pointed out that in the case of SEZ the condition has to be complied being mandatory. However, the Ld. AR, has not been able to convince me as to how the said condition which is similar in all the notifications discussed in the case laws would stand on a different footing. 9. In view thereof, I hold that the rejection of refund is unjustified. The impugned order is set aside. The appeal is allowed with consequential reliefs, if any. (Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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