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2016 (6) TMI 998 - HC - Central ExciseCenvat Credit - reversal of credit u/s 6 - clearance of final products to SEZ developers without payment of duty Whether the amendment to the Cenvat Credit Rules 2004, by substituting clause(i) of sub-rule (6) of Rule 6 of Cenvat Credit Rules 2004 by way of notification No.50/2008-C.E (N.T.) dated 31.12.2008 is prospective in operation or retrospective? - Held that - Tribunal cannot be said to have committed error in following the decision of this Court in case of Fosroc Chemicals (India) Pvt. Ltd., 2014 (9) TMI 633 - KARNATAKA HIGH COURT - When the issue is already covered by the decision of this Court, it cannot be said that any questions of law would arise for consideration as sought to be canvassed. On the aspects of appeal preferred before the Apex Court, the learned Counsel has not been able to show that any interim stay has been granted restraining the operation and implementation of the decision of this Court in the above referred matter. - revenue appeal dismissed - Decided against the revenue.
Issues Involved:
1. Whether the amendment to the Cenvat Credit Rules, 2004, by substituting clause (i) of sub-rule (6) of Rule 6 by notification No. 50/2008-C.E (N.T.) dated 31.12.2008 is prospective or retrospective in operation. 2. Whether the Tribunal erred in following the decision of the High Court in the case of Fosroc Chemicals (India) Pvt. Ltd. 3. Whether any questions of law arise for consideration in light of the Tribunal's adherence to the High Court's decision. Detailed Analysis: Issue 1: Retrospective or Prospective Operation of Amendment to Cenvat Credit Rules, 2004 The primary issue revolves around the interpretation of the amendment to the Cenvat Credit Rules, 2004, specifically whether the amendment made by notification No. 50/2008-C.E (N.T.) dated 31.12.2008 is retrospective or prospective. The High Court referenced its earlier decision in the case of Fosroc Chemicals (India) Pvt. Ltd., where it was determined that the amendment is clarificatory in nature and thus retrospective. The Court emphasized that the substitution of the provision implies that the altered words should be read as if they were part of the original text from the inception. The Court cited several precedents, including the Constitution Bench decisions in SHAMARAO V. PARULEKAR and SHYAM SUNDER & Others vs. RAM KUMAR & Another, which support the view that substituted provisions are to be treated as part of the original enactment from the beginning. Issue 2: Tribunal's Adherence to High Court Decision The appellant contended that the Tribunal should have independently considered the matter since the decision of the High Court in Fosroc Chemicals (India) Pvt. Ltd. was under appeal before the Apex Court. However, the High Court noted that the Tribunal correctly followed the binding precedent set by the High Court. The Tribunal's reliance on the High Court's decision was deemed appropriate, and no error was found in this approach. Issue 3: Questions of Law for Consideration The High Court addressed whether any substantial questions of law arose from the Tribunal's decision. It concluded that since the issue was already settled by the High Court's decision in Fosroc Chemicals (India) Pvt. Ltd., no new questions of law were presented. The appellant failed to demonstrate any interim stay from the Apex Court that would impact the implementation of the High Court's decision. Consequently, the High Court found no basis for interference. Conclusion: The High Court dismissed the appeal, affirming that the amendment to the Cenvat Credit Rules, 2004, is retrospective in nature, as clarified by the decision in Fosroc Chemicals (India) Pvt. Ltd. The Tribunal's adherence to this decision was appropriate, and no substantial questions of law were identified for further consideration.
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