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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 ..... e 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 – answered in favor of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ng upon Rule 9(2), the assessing Officer issued a show cause notice asking assessee to reverse the credit of Rs.98,240.81. The assessee contested the notice on various grounds and relied upon the judgment of the Larger Bench of the Tribunal Commissioner of Central Excise, Rajkot Vs. Ashok Iron & Steel Fabricators, 2002 (140) ELT 277 and several judgments of other High Courts. The demand was confirmed by the Assistant Commissioner who also imposed penalty of Rs.98240/-. The assessee filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) held that the assessee was not required to reverse the credit involved on stocks lying in the factory when the appellant opted to avail the SSI benefit and opted out of the CENVAT Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the balance, if any, lying in his credit, the balance, if any, still remains shall lapse and shall not be allowed to be utilized for payment of duty on excisable goods, whether cleared for home consumption or for export." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance 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." 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. It would also be pertinent to mention here that the High Court of Kerala in Collector of Central Excise and Custom, Cochin Versus Premier Tyres Ltd. 2001 (130) ELT 417 following the judgment of the Apex Court answered a similar question in favour of the assessee and against the Department. 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 Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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