M/S. AMRIT PAPER versus COMMISSIONER OF CENTRAL EXCISE, LUDHIANA

Citation: [2006] SUPP. 4 S.C.R. 144 · Decided: 25-07-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

A 
B 
M/S. AMRIT PAPER 
v. 
COMMISSIONER OF CENTRAL EXCISE, LUDHIANA 
JULY 25, 2006 
[ARIJIT PASA VAT AND S.H. KAPADIA, JJ.] 
Central Excise Rules, 1944-Rule 57C-Notification No. 612000-CE-
Assessee is not entitled to Modvat credit of duty if the final product is exempt 
C from duty-On facts, assessee had availed of the Modvat credit al the time of 
the clearance of the goods-Thereafter, suo moto reversed credit and paid 
the duty--./ts claim for refund of modvat-credit was allowed-It again filed 
refund claim on the ground that final product was exempt from duty, which 
was rejected--Correctness of-Held. assessee was not entitled to exemption, 
D hence refund claim was rightly rejected. 
By virtue of Notification No. 6/2000-CE, the product manufactured 
by assessee was exempt from payment of duty during the month of March, 
2000. The assessee, in March, 2000 availed the credit and also cleared the 
goods at nil rate of duty under the said Notification. Thereafter, it suo 
E moto reversed the credit to avail the exemption and subsequently paid the 
duty for March 2000 and also filed refund claim in respect of the credit 
reversed by it. The Assistant Commissioner allowed the claim of refund. 
Appellant thereafter preferred a refund claim contending that it was 
entitled to benefit on the said Notification. The Assistant Commissioner 
F and Appellate Authority rejected the claim of refund. Tribunal also 
dismissed the appeal. 
In appeal to this Court, assessee-appellant contended that the 
Tribunal was not justified in holding that the entitlement to exemption 
under the Notification in question was dependent upon whether the 
G assessee had availed Mod vat credit of input duty under the Central Excise 
Rules, 1944. 
Dismissing the appeal, the Court 
HELD: I. Rule 57C of Central Excise Rules, 1944 provides in 
H mandatory and categorical terms that no credit of the specified duty paid 
144 
AMRIT PAPER v. COMMR. OF CENTRAL EXCISE, LUDHIANA [PASAYAT, J.] 
J 4 5 
on the inputs used in the manufacture of a final product shall be allowed A 
if the final product is exempt from the whole of the duty of excise leviable 
thereon or is chargeable to nil rate of duty. The manufacturer had availed 
of the credit at the time of the clearance of the goods and had suo moto 
reversed it to avail the exemption later on almost after 15 months when it 
claimed refund of modvat-credit, hence it was not entitled to exemption. B 
1150-F-GJ 
lchalkaranji Machine Centre Pvt. Ltd. v. Collector of Central Excise, 
Pune (2004) (174) E.L.T. 417 SC, relied on. 
Orissa Extrusions v. Collector of Central Excise Bhubaneswar, (2000) c 
115 E.L.T. 30 SC, overruled. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4891 of2005. 
From the Final Order No. A/82/05-NB/SM, dated 10.1.2005 of the 
Customs, Excise & Service Tax Appellate Trfuunal, New Delhi in Appeal 
No. E/2318/04-NB(S). 
D 
C. Harishankar, P. Mohapatra, S. Sunil and Neeru Vaid for the Appellant. 
A. Subba Rao, Ajay Sharma, Shipla Singh, B.K. Prasad and P. 
Parmeswaran for the Respondent. 
The Judgment of the Court was delivered by 
ARIJIT PASAYA T, J. Challenge in this appeal filed under Section 
35L of the Central Excise Act, 1944 (in short the 'Act') is to the legality of 
judgment rendered by the Customs, Excise and Service Tax Appellate Tribunal, 
E 
New Delhi (in short the 'Tribunal'). 
F 
The controversy lies within a very narrow compass. 
Appellant is engaged in the manufacture of paper and paper board 
falling in Chapter 48 of the Tariff. Notification No.6/2000-CE dated 1.3.2000 
was issued whereby the product manufactured by the appellant was exempted G 
from payment of duty during the month of March, 2000. Appellant availed 
credit as well as cleared goods under the said exemption notification. 
Thereafter, it suo motu reversed the credit of Rs. I,92,365/- to avail the 
exemption. It deposited the duty on 30.8.2000 for the month of March, 2000 
and also applied for refund of the Mod vat credit of Rs. I, 92,365/- which was 
already reversed by it. The claim of refund was allowed by order dated H 
146 
SllPREME COURT REPORTS (2006] SUPP. 4 S.C.R. 
A 13.12.2001 passed by the Assistant Commissioner. Thereafter, the appellant 
again suo motu reversed the Modvat credit and filed the refund claim on 
12.7.2001 in respect of the duty paid on 30.8.2000 for the month of March, 
2000, claiming benefit under the aforesaid notification No.6/2000-CE. The 
claim for refund was rejected by the Ass

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