2015 (11) TMI 1742 - AT - Central Excise

Whether non-applicability of the provisions of sub-rules (1), (2), (3) and (4) in terms of sub-rule (6) of Rule 6 of Cenvat Credit Rules, 2004 will be applicable to the supplies of goods to the Developer w.e.f. 31-12-2008, or the same can date back to the event, taken place in this particular case, i.e. from January, 2008 to December, 2008? Held that - the Hon ble Karnataka High Court in the case of Commr. of C. Ex. & S.T., Bangalore v. Fosroc Chemicals (India) Pvt. Ltd. 2014 (9) TMI 633 - KARNATAKA HIGH COURT have held that when any rule is amended by way of substitution, the same will have retrospective effect - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of the applicability of sub-rule (6) of Rule 6 of Cenvat Credit Rules, 2004 to supplies of goods to SEZ Developer from January 2008 to December 2008.

Detailed Analysis:

1. Background and Dispute: The appellant, engaged in the manufacture of aluminium extruded products, availed Cenvat credit for Central Excise Duty paid on inputs used in manufacturing. The dispute arose when the Department contended that sub-rule (6) of Rule 6 of the Cenvat Credit Rules, regarding non-applicability of certain sub-rules to SEZ Developer, came into effect from 31-12-2008. The Department initiated proceedings leading to an adjudication order confirming a substantial amount against the appellant along with a penalty.

2. Arguments: The appellant's advocate argued that the issue was settled based on previous decisions like Siemens Ltd. v. Commissioner of C. Ex., Navi Mumbai and others, indicating that the benefit of sub-rule (6) of Rule 6 should be available even for supplies made to SEZ Developer before 31-12-2008.

3. Contentions: The Revenue, represented by the ld. DR, supported the findings of the lower authorities, maintaining the position taken in the adjudication order.

4. Legal Precedents: The Tribunal referred to the decision of the Hon'ble Karnataka High Court in the case of Commr. of C. Ex. & S.T., Bangalore v. Fosroc Chemicals (India) Pvt. Ltd., which held that amendments by way of substitution have retrospective effect. The Tribunal also cited previous decisions supporting the consideration of supplies made to SEZ Developer before 31-12-2008 for the benefit of sub-rule (6) of Rule 6.

5. Decision: Considering the settled legal principles and precedents, the Tribunal concluded that the impugned order lacked merit. Therefore, the Tribunal set aside the order, allowing the appeal in favor of the appellant. The judgment was dictated and pronounced in the open court by the Member (J) Shri S.K. Mohanty.

This detailed analysis provides a comprehensive overview of the legal judgment, focusing on the interpretation of the applicability of sub-rule (6) of Rule 6 of the Cenvat Credit Rules to supplies of goods to SEZ Developer during a specific period, supported by legal arguments, precedents, and the final decision of the Tribunal.