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TMI Blog2009 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... k or in process or contained in final product lying in stock. The short question which arises for decision is whether a manufacturer who has obtained credit of the Central Value Added Tax paid by him in respect of the raw material and inputs lying in stock or in process or contained in the final product lying in stock is required to refund/repay the credit when the final product is exempted from excise. The main argument of Sh.Sandeep Sharma, learned Assistant Solicitor General of India is that the authorities below have not taken into consideration Rule 9(2) of the Cenvat Rules. The brief facts of the case are that the assessee vide letter dated 21.10.2002 opted for Cenvat Credit Scheme notified on 1.3.2002. The assessee obtained Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme. Thereafter, the revenue filed an appeal before the Tribunal which rejected the same on the ground that a five Member Bench of the Tribunal in the case of Ashok Iron & Steel Fabricators supra had taken a view that the asssssee in such circumstances is not required to reverse the credit. The main argument of Sh.Sandeep Sharma, learned Assistant Solicitor General of India is that in the case of Ashok Iron & Steel Fabricators, the Tribunal held that there was no rule which permitted the department to seek reversal of the Modvat credit. He relies upon Rule 9(2) of the Cenvat Rules in this behalf. It is pertinent to mention here that the Apex Court in Collector of Central Exicse, Pune and others Vs. Dai Karkaria Ltd. and others 1999 (7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 out of the particular raw material to which the credit is related. The credit may be taken against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than in Hindustan Zinc Ltd. Vs. Union of India, 2008 (223) ELT 149. The High Court held as follows:- "It can be seen from yet another angle. In case inputs are received in factory and used in manufacture of end product. But the end product is destroyed by fire before stage of its removal from factory premise. In such circumstances, no excise duty becomes payable on end product. Yet Modvat credit availed on inputs used in destroyed goods is not to be recalled. This is also suggestive of the fact the relevant date for considering exemption from duty of the end product in or in relation to which inputs are used is the date of its receipt in factory and condition is its actual use in or in relation to manufacture of end product by the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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