2012 (10) TMI 415 - HC - Central Excise

Cenvat Credit - retrospective amendment or prospective amendment - The question was as to whether the Appellant had failed to reverse an amount equivalent to ten percent of the value of the goods from the Cenvat Credit account in relation to goods cleared to SEZ Developers. - Held that - Tribunal in its impugned order has observed that prima facie the amendment by the notification dated 31 December 2008 could not be retrospective since it was not clarificatory. However, tribunal in Sujana Metal Products Pvt. Ltd. - (2011 (9) TMI 724 - CESTAT, BANGALORE) has taken the view therein that the amendment by the notification dated 31 December 2008 is clarificatory and hence retrospective in nature. Matter remanded to Tribunal for fresh consideration

Summary

Issues:
1. Interpretation of Rule 6(6)(i) of the Cenvat Credit Rules, 2004 regarding waiver of pre-deposit.
2. Determination of whether an amendment to Rule 6(6) by a notification was clarificatory or substantive.
3. Consideration of Tribunal orders in similar cases for establishing precedents.
4. Relevance of subsequent developments in similar cases for reconsideration of waiver application.
5. Decision on remand for fresh determination of waiver application by the Tribunal.

Issue 1 - Interpretation of Rule 6(6)(i) of the Cenvat Credit Rules, 2004 regarding waiver of pre-deposit:
The Tribunal directed the Appellant to deposit 60% of the demanded amount within a specified period based on the failure to reverse an amount from the Cenvat Credit account in relation to goods cleared to SEZ Developers. The question revolved around whether a prima facie case for total waiver was established, as per Rule 6(6)(i) provisions.

Issue 2 - Determination of whether an amendment to Rule 6(6) by a notification was clarificatory or substantive:
The Tribunal deliberated on whether the amendment to Rule 6(6) by a notification dated 31 December 2008 was clarificatory or brought about a substantive change. The Tribunal concluded that the amendment was not retrospective and observed that it was not clarificatory, raising the issue of prospective application.

Issue 3 - Consideration of Tribunal orders in similar cases for establishing precedents:
The Tribunal assessed various orders passed on applications for stay/waiver, emphasizing that these orders did not set binding precedents as they were based on stay orders and did not discuss the provision of law in detail. The relevance of past orders for establishing a binding precedent was questioned.

Issue 4 - Relevance of subsequent developments in similar cases for reconsideration of waiver application:
The Appellant highlighted subsequent developments in similar cases, particularly a final view taken by the Bangalore Bench of the Tribunal in a related case. The argument was made that the Tribunal should reconsider the waiver application in light of these developments for a fair and just decision.

Issue 5 - Decision on remand for fresh determination of waiver application by the Tribunal:
The High Court, without expressing a final opinion on the clarificatory nature of the amendment, set aside the Tribunal's order and remanded the case for a fresh determination. The Court emphasized the importance of considering subsequent developments and ordered a reevaluation of the waiver application by the Tribunal for a just decision.

In conclusion, the High Court's judgment focused on the interpretation of Rule 6(6)(i), the nature of the amendment to the rule, the relevance of past Tribunal orders, the impact of subsequent developments, and the need for a fair reconsideration of the waiver application.