2016 (3) TMI 1399 - AT - Central Excise

CENVAT Credit - exempt goods or not - Clearance of excisable final Products to the SEZ developer without Payment of Central Excise duty - retrospective application of Rule 6 of CCR - HELD THAT - The issue arising out of the present dispute regarding retrospective application of Rule 6 ibid, amended on 31.12.2008 has already been settled by the decisions relied on by the ld. Advocate in the case of THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX AND THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S FOSROC CHEMICALS (INDIA) PVT LTD AND OTHERS 2014 (9) TMI 633 - KARNATAKA HIGH COURT , wherein the Hon ble Karnataka High Court has held that the amendment took place in Rule 6 (6) (i) in 2008 has to be construed as retrospective in nature and the said statutory provision will be extended to the goods cleared to a developer of a special economic zone for their authorised operations. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Retrospective application of Rule 6 of the Cenvat Credit Rules 2004 amended on 31.12.2008.

Analysis:
The appeal was filed against an order passed by the Commissioner of Customs and Central Excise (Appeals), Jaipur. The appellant, engaged in manufacturing electrical copper wires & cables, availed cenvat credit of Central Excise duty paid on inputs. During the disputed period from April 2007 to December 2008, the appellant cleared excisable final products to the SEZ developer without paying Central Excise duty. The Central Excise Department considered this as exempted goods and raised a demand against the appellant.

The appellant's advocate argued that the SEZ developer's inclusion in Rule 6 of the Cenvat Credit Rules 2004 on 31.12.2008 should have a retrospective effect. Citing judgments from various courts and tribunals, the advocate contended that the benefit provided in the amended rule should apply to the appellant for supplying goods to SEZ developers during the disputed period.

The Revenue's representative reiterated the findings of the impugned order. After hearing both sides and examining the records, the Member (Judicial) noted that the issue of retrospective application of Rule 6, as amended in 2008, had been settled in previous decisions. Referring to the judgment of the Hon'ble Karnataka High Court in the case of Fosroc Chemicals (India) Pvt. Ltd., the Member concluded that the amendment should be construed as retrospective. As the issue was no longer res-integra and had been addressed in various judicial forums, the Member found no merit in the impugned order and allowed the appeal in favor of the appellant.