ORDER
K.S. Venkataramani, Vice President
1. The appellants herein took Modvat credit on inputs used in the manufacture of their final product which became exempt from duty by Notification Nos. 85 & 86, dated 11-9-1991. The jurisdictional Asstt. Commissioner confirmed the demand of duty on inputs used in the manufacture of the finished goods lying uncleared as on 11-9-1991. The said order having been confirmed by the Commissioner of Central Excise (A), Mumbai the present appeal has been filed.
2. Shri R.G. Sheth, the ld. Counsel for the appellants relied upon the Larger Bench decision of the Tribunal in the case of Kirloskar Oil Engines Ltd. v. C.C.E. – 1994 (73) E.L.T. 835 (Tribunal) wherein the Larger Bench held that where there was an existing exemption notification for the final product at the time of receipt of input, then the bar on Modvat credit under Rule 57C of Central Excise Rules will apply. The Larger Bench, however, did not express any final opinion in respect of the situation where the notification exemption the final product comes into effect after the receipt of the input and taking of the credit. As against this, Shri S.V. Singh, the ld. DR relied upon the Allahabad High Court judgment in the case of Super Cassettes Industries Ltd. v. U.O.I. -1997 (94) E.L.T. 302 (All.) where the High Court has held that even in such cases Rule 57C barring Modvat credit when the final product is exempted will come into play.
3. On a consideration of the submissions, we find that a specific contention was raised before the Allahabad High Court that when the credit was taken and when the final product was not exempted and it is only subsequently it became exempted, Rule 57C was not attracted. The High Court, however, repelled the contention observing that this contention is not correct and held that whole scheme is in respect of excisable goods and, therefore, if the product is exempted from excise duty from a particular date the Modvat credit taken in respect of inputs which are in stock has to be reversed. Following the High Court judgment, we see no reason to interfere with the impugned order.
4. Appeal is rejected.