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TMI Blog2017 (5) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... y reversal to Cenvat credit but later-on filed refund claim of the said amount as they were not required to pay the said amount. The adjudicating authority rejected the refund claim holding that they are required to reverse the Cenvat credit contained in input in progress for finished goods lying in stock. The said order was challenged before the ld. Commissioner (Appeals), who allowed the refund claim but the same was credited in Cenvat credit account. Aggrieved form the said order, the appellant is before me. 3. Ld. Counsel for the appellant submits that the refund should be given to them in cash as they are unable to utilise the Cenvat credit lying unutilised or is paid through PLA. 4. Heard both sides. Considering the fact that a similar issue has come up before this Tribunal in the case of Max Power Infosystem and the Division Bench of this Tribunal, vide Final Order No. 60042-60043/2017 dated 02.01.2017 held that at the time of opting exemption Notification No. 50/2003, the assessee is not required to reverse the Cenvat credit and the Cenvat credit/ amount paid through PLA is to be given in cash. The relevant portion of the decision is reproduced as under:- "4. On careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the case on hand and the Tribunal was justified in granting benefit. 5. It was pointed out to us that in the year 2008 (sic) sub-rule (3) was inserted by a Notification No. 10/2007 with effect from 1-3-2007, which reads as under :- (3) A manufacturer or producer of a final product shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if, - (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be exempt from payment of excise, the assessee cannot be asked to reverse the Modvat credit already taken by it. 9. Further in the case of Himachal Futuristic Communications Ltd. vide Final Order No.61395-61396/2016-EX (DB) dated 19.9.2016 wherein this Tribunal has observed as under: 5. We find that the sole question for consideration is that whether the inputs lying in stock on the date on which exemption Notification No.50/2003-CE dated 10.6.2003 exempted final product, the appellant is required to reverse the credit lying in their stock or not. 6. The issue came up before this Tribunal in the case of H.M.T. (supra) wherein the larger bench of this Tribunal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or for export. 8. After considering the Rule 57, the Apex Court held as follows :- It is clear from these rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty 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 utilized, 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 noted that there is no corelation 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 manufactured o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or non-chargeability due to exemption or notified nil rate is to be considered at the stage before goods are actually produced, but on receipt of inputs intended to be used in manufacture of such goods. That being so ultimate clearance of goods at nil rate due to contingency existing at the time of removal does not affect the entitlement that legally arises long before that date. 13. 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. 14. In view of the above discussion, the question is answered in favour of the assessee and against the Revenue. The appeal is accordingly dismissed. No order as to costs. 8. Further, the issue has been examined by Hon'ble High Court of Himachal Pradesh in the case of Ranbaxy Laboratories Ltd. wherein again the Hon'ble High Court has observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. In fact this Court, while deciding the aforesaid appeals, took into account not only the relevant provisions of law but also the decisions rendered by various High Courts as also the Apex Court in Excise, Pune and Others v. Dai-Ichi Karkaria Ltd. and Others, 1999 (112) E.L.T. 353 (S.C.) = (1999) 7 SCC 448. 9. As the issue has already been settled in favour of the appellants, therefore, we hold that at the time opting area based exemption of Notification No.50/2003-CE dated 10.6.2003, the appellants are not required to reversed the credit in their cenvat credit account lying unutilized. 10. As the issue has already been settled by various judicial pronouncements, therefore, the issue no more res-integra. Therefore, we hold that the assessee is not required to reverse the credit which was availed at the time when the final product was dutiable while opting for availing the exemption under Notification No.50/2003-CE ibid. Therefore, we do not find any merit in the appeal filed by the Revenue. Accordingly, the impugned order quo holding that the assessee is entitled for refund claim is affirmed and the appeal filed by the Revenue is dismissed. Issue No.(b) 11. The contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to show cause as to why the refund claimed by them should not be disallowed. And further considering the contention of the Hon'ble High Court has observed as under: 20. Upon hearing the learned Counsel, the Court finds that the adjudicating authority had sanctioned the refund claimed by way of credit in their RG23A Part II account. The Court finds that the assessee is availing exemption and is not in a position to utilize the credit and if the assessee is not able to utilize the credit, the very basis of the refund is defeated. Consequently, the Commissioner (Appeals) was justified in giving the assessee the cash refund of the credit. In Commissioner of Central Excise v. Ashok Arc - 2006 (193) E.L.T. 399 = 2007 (7) S.T.R. 365, the High Court of Jharkhand held that the assessee is entitled for the refund in cash. In view of the aforesaid, the submission of the learned Counsel for the appellant cannot be accepted. 12. The Hon'ble High has 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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