Input credit not allowed if Final Product exempt from Tax and such duty cannot be refunded

The modvat credit availed by the assessee was used for payment of excise duty, though under protest and there is no provision for cash refund of such duty paid through modvat credit. It is also relevant to consider Rule 57L of the Rules which says that no credit of money on the inputs used in the manufacture of the final products shall be allowed if the final products are exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty. In this case, by the time of the judgment of this Court, the duty was paid from the input credits availed by the assessee. Bot...