2006 AIR SCW 3894 ::(2006) 200 ELT 365 ::(2006) 136 ECR 402 ::2006 (6) SCC 345 ::(2006) 7 Scale 434 ::MANU/SC/3346/2006 ::(2006) 7 SCJ 38 ::(2006) 5 Supreme 921 ::(2006) 45 AllIndCas 69 (SC)

Supreme Court Of India

Hon'ble Judge(s): Arijit Pasayat, S. H. Kapadia , JJ

Central Excise Act (1 of 1944) , S.37— Central Excise Rules (1944) , R.57C— Scope and applicability of R. 57-C - Manufacturer availing credit as provided by exemption notification, at time of clearance of goods - Thereafter, he suo motu reversed it and paid the duty to avail exemption after several months when he claimed refund of Modvat credit - Held that, he would not be entitled to exemption. 2000 (115) ELT 30 (SC), not good law in view of 2005 AIR SCW 57. Rule 57-C provides in mandatory and categorical terms that no credit of the specified duty paid on the inputs used in the manufacture of a final product (of the enumerated categories) shall be allowed if the final product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty.(Para 15) @page-SCW3895 Thus, where the manufacturer had availed of the credit as provided by exemption notification at the time of the clearance of the goods and cleared the goods at nil rate of duty, however, he suo motu reversed it and paid the duty to avail the exemption later on after several months when it claimed refund of Modvat credit, it was held that, he would not be entitled to exemption. In such a case, R. 57-C cannot be given go-by while interpreting the notification exempting the manufacturer from payment of dut....