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2018 (3) TMI 611 - AT - Central Excise100% EOU - CENVAT credit - Rule 3(7) (a) of the Cenvat Credit Rules, 2000 - Held that - there is no dispute about the fact that during the relevant period, the percentage of BCD to be adopted in the formula was to the extent of 25% which stands raised to 50% with effect from 5.12.2008. The amending notification itself makes it clear that the same shall come into force on the date of their publication in the official gazette. It is a case where a benefit already extended to the industry stand enhanced. The entire period is before 5.12.2008 and I really fail to understand as to how the appellant could foresee the enhancement in the BCD percentage and could have availed 50% of BCD, while calculating the quantum of Cenvat credit available to them. During the relevant period, the formula prescribed adoption of 25% of BCD and by no stretch, it can be held that 50% of BCD was available to the assessee prior to 5.12.2008. Appeal dismissed - decided against appellant.
Issues:
1. Availing excess Cenvat credit by adopting 50% of BCD instead of 25%. 2. Dispute regarding the retrospective nature of Notification No.48/2008-CE. 3. Applicability of the increased BCD percentage from 5.12.2008. 4. Interpretation of legal provisions and benefit extension timing. Issue 1: Availing Excess Cenvat Credit The appellant, engaged in cement and clinker manufacturing, availed excess Cenvat credit by adopting 50% of BCD instead of the prescribed 25% during October 2008 to 4.12.2008, resulting in an excess credit of ?3,88,363. Proceedings were initiated against them through a show cause notice proposing confirmation of the excess credit and penalties, leading to an order by the original adjudicating authority confirming the demand and imposing penalties. Issue 2: Dispute Regarding Retrospective Nature of Notification The appellant contended that the percentage of BCD was increased to 50% through Notification No.48/2008-CE dated 5.12.2008, arguing that the notification should be considered retrospective. However, the Commissioner (Appeals) rejected this plea, stating that the amendment was applicable only from 5.12.2008 onwards, as per the plain reading of the notification. The appellant's argument for retrospective benefit was dismissed, emphasizing that the changes in the rule were not retroactive. Issue 3: Applicability of Increased BCD Percentage The Tribunal upheld the orders, noting that during the relevant period, the BCD percentage in the formula was 25%, later increased to 50% from 5.12.2008. The Tribunal emphasized that the appellant could not have foreseen this enhancement and availed 50% of BCD before the effective date. The prescribed formula allowed 25% of BCD during the relevant period, and the Tribunal found no merit in the appellant's argument, leading to the rejection of the appeal. Issue 4: Interpretation of Legal Provisions and Benefit Extension Timing The Tribunal clarified that the case did not involve interpreting legal provisions but rather an enhancement of a benefit already granted to the industry. As the entire period in question was before 5.12.2008, the Tribunal found it unreasonable for the appellant to claim 50% of BCD when the prescribed percentage was 25%. The Tribunal upheld the impugned orders, emphasizing that the appellant's stand lacked merit. This judgment highlights the importance of adhering to prescribed rules and timelines in availing Cenvat credit, emphasizing that benefits cannot be retrospectively applied unless explicitly stated. The Tribunal's decision underscores the need for strict compliance with statutory provisions and the limitations of benefit extensions in tax matters.
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