2009 (3) TMI 189 - AT - Central Excise

The appellant filed this appeal on the ground that utilization of credit of Additional Excise Duty towards payment of basic excise duty was disallowed as per the impugned order. We find that credit was availed in respect of Additional Excise Duty paid on inputs prior to 1-4-2000 and credit was utilized towards payment of basic excise duty on 1-4-03 and these facts are not in dispute. Relevant Rule was amended retrospectively on 10-9-04 to the effect that the credit of Additional Excise Duty taken before 1-4-2000 cannot be utilized towards payment of basic excise duty. In view of this retrospective amendment, we find no merit in the appeal.

Summary

Issues involved: Appeal against disallowance of utilization of credit of Additional Excise Duty towards payment of basic excise duty.

Analysis:
1. Issue of disallowance of credit utilization: The appellant contended that the utilization of credit in respect of additional excise duty towards the basic duty was allowed w.e.f. 1-3-03, and on that day, the credit was utilized for payment. However, the Revenue argued that as per Rule 57-AB Cenvat Credit Rules, the credit of additional duty of excise could only be used towards payment of additional duty of excise before 1-3-03. The relevant Rule was amended retrospectively on 10-9-04, stating that credit availed before 1-4-2000 cannot be used for basic excise duty payment even after 1-3-03. The Tribunal found that the credit was indeed availed before 1-4-2000 and utilized for basic excise duty on 1-4-03. Due to the retrospective amendment, the appeal was dismissed as the credit could not be used for basic excise duty payment post the specified dates.

2. Interpretation of relevant Rules: The case involved a detailed analysis of Rule 57-AB of the Cenvat Credit Rules, focusing on the restrictions and amendments regarding the utilization of credit for excise duty payments. The retrospective amendment on 10-9-04 clarified that credits availed before a specific date could not be used for certain payments post the specified dates. The Tribunal carefully examined the provisions of the Rules and applied them to the facts of the case to determine the legality of the credit utilization for basic excise duty payment.

3. Impact of retrospective amendment: The retrospective amendment made by the Finance Act played a crucial role in the Tribunal's decision. The Tribunal emphasized that the credit availed before the specified date could not be utilized for basic excise duty payments, even if such utilization had been allowed earlier. This retrospective change in the law had a direct impact on the appellant's case, leading to the dismissal of the appeal based on the amended provisions of the relevant Rules.

In conclusion, the judgment by the Appellate Tribunal CESTAT, KOLKATA highlighted the importance of adhering to the amended provisions of the Cenvat Credit Rules regarding the utilization of credits for excise duty payments. The retrospective amendment significantly influenced the outcome of the case, resulting in the dismissal of the appeal due to the inapplicability of the credit for basic excise duty payment post the specified dates as per the amended Rules.