(Judgment of the Court was delivered by K.KALYANASUNDARAM,J.) Heard Mr.R.Aravindhan, learned counsel for the appellant and Ms.R.Charulatha, learned counsel for the second respondent.
2.It is submitted by both counsels that the issue involved in this Civil Miscellaneous Appeal is squarely covered by the decision of this Court reported in 2015(320) ELT 357 (Mad.) (Tractor and Farm Equipment Ltd. Vs. Commr.of C.Ex.Madurai - II). The relevant portions from the said judgment reads as follows:
"14.In the instant case, assuming for the moment that the credit is available, it can be used for payment of duty on any other excisable articles and not exempted goods. In such view of the matter, we are not agreeable with the view taken by the Allahabad High Court that it will amount to unjust enrichment. We also notice that the decision is Super Cassettes Industries Ltd. case referred supra, which has been relied upon by the Division Bench in Brook Bond Upton India Ltd, case, referred supra, did not find favour with the Supreme Court in Dai Ichi Karkaria Ltd case, referred supra. In such view of the matter, it has to be held that the view taken by the Allahabad High Court has not been accepted by the Supreme Court.
15.At this juncture, the Tribunal in Ashok Iron and Steel Fabricators case, referred supra as well as the decision of the Bangalore Bench of the Tribunal in the assessee's own case have emphasised over and over again on para 17 of the decision of in Dai Ichi Karkaria Ltd.case, referred supra, which has very clearly set out the position as to how the credit taken on inputs should be utilized. To sum up, paragraph 17 of the Dai Ichi Karkaria Ltd http://www.judis.nic.in 3 case, referred supra, which answers the present issue, is extracted hereunder:
"17.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 others 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 utilised, 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 correlation 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 the excise duty on a final product manufactured on the very day that it becomes available." (emphasis supplied)
16.Once it is held that no co-relation between the raw material and the final product is required, the appellant's plea stands answered. If credit can be taken against excise duty on a http://www.judis.nic.in 4 final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken credit need not be reversed. The Central Excise rules would come into play in the following manner, that is to say, on the date when the final goods become exempt from payment of duty, for the inputs received on and after the said date, no credit can be taken. This would be the correct method of understanding of the position of law.
17.The introduction of Rule 11(3) of the Cenvat Credit Rules, 2004, by Notification No.10/2007-.C.E.(N.T.) dated 01.03.2007 and the Tax Research Unit Circular in D.O.F.No.334/1/ 2007-TRU, dated 28.02.2007 clarifying that it will come into effect immediately, makes it clear that the position of law as it stood decided in the assessee's own case by the Karnataka High Court, the appeal against which was dismissed by the Supreme court, is the correct position. The Tribunal in this case erred in distinguishing the decision of the Bangalore Bench Tribunal placing reliance on Albert David Ltd. case, referred supra. In any event, Ashok Iron and Steel Fabricators case, referred supra, is a Larger Bench decision and the same has been upheld by the Supreme Court and that would be binding on the Tribunal, rather than the Two-Member Bench decision in Albert David Ltd.case, referred supra.
18.For the foregoing reasons, we allow the appeal answering the substantial questions of law (1) to (4) in favour of the appellant and against the department. In such view of the matter, we do not propose to answer the substantial question of law (5) as the same is purely academic. No costs."
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3.It is also stated by the learned counsel on either side that the above said decision of the Division Bench has been upheld by the Hon'ble Apex Court.
4.In the light of the above facts, we find no merit in this Civil Miscellaneous Appeal. Accordingly, this Civil Miscellaneous Appeal is dismissed. No costs.
Excise and Service Tax Appellate Tribunal, Madras Bench, Shastri Bhavan, 26, Haddows Road, Chennai 600 006.
http://www.judis.nic.in 6 K.KALYANASUNDARAM,J.
AND R.THARANI,J.
nbj C.M.A.(MD)No.1099 of 2007 22.03.2019 http://www.judis.nic.in