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2018 (7) TMI 1113 - AT - Central ExciseCENVAT Credit - supply of goods to SEZ at NIL rate of duty - sub Rule (3) of Rule 6 of Cenvat Credit Rules - amendment through Notification dated 31.12.2008 having retrospective effect or not? - Held that - The said amendment, amended through said Notification dated 31.12.2008 is having retrospective effect. Therefore, said amended provision was applicable to the clearances covered by the impugned Order-in-Original. Once the said provisions become effective for the period of show cause notice the Cenvat Credit availed by the appellant which has gone into the goods manufactured which were cleared at nil rate of duty and supplied to SEZ developers for the period from 17.05.2008 to 15.10.2018 become lawful credit. Appeal allowed - decided in favor of appellant.
Issues:
1. Interpretation of sub Rule (3) of Rule 6 of Cenvat Credit Rules regarding payment requirements for clearances at nil rate of duty to SEZ Developers. 2. Applicability and retrospective effect of the amended provision under Notification No. 50/2008-CE (NT) dated 31.12.2008. 3. Dispute over the retrospective application of the amended provision and its impact on Cenvat Credit availed by the appellant. Issue 1: Interpretation of sub Rule (3) of Rule 6 of Cenvat Credit Rules The case involved a dispute regarding the payment obligations under sub Rule (3) of Rule 6 of Cenvat Credit Rules for clearances of final products at nil rate of duty to SEZ Developers. The Revenue contended that the appellant was required to pay a specific amount under Rule 14 of Cenvat Credit Rules, 2004. The Original Authority upheld the demand, leading to the appellant's appeal before the Tribunal. Issue 2: Applicability and retrospective effect of the amended provision The appellant argued that the amended provision under Notification No. 50/2008-CE (NT) dated 31.12.2008 had retrospective effect, allowing goods cleared at nil rate of duty to SEZ developers to avail Cenvat Credit on input or input services. Citing judgments by various High Courts, the appellant claimed that the amended rule was clarificatory and enforced from the inception of Cenvat Credit Rule, 2004. The Revenue, however, referred to a CBEC Circular stating that the amendment was prospective. Issue 3: Dispute over retrospective application and impact on Cenvat Credit The Tribunal considered the conflicting arguments and the legal precedents cited. It noted that High Courts had ruled in favor of the retrospective effect of the amended provision. Consequently, the Tribunal held that the appellant was entitled to avail Cenvat Credit for the goods cleared at nil rate of duty to SEZ developers during the relevant period. As a result, the impugned Order-in-Original was set aside, and the appeal was allowed, granting the appellant consequential relief in accordance with the law. This judgment highlights the importance of interpreting statutory provisions, understanding the retrospective application of legal amendments, and considering judicial precedents in resolving disputes related to tax liabilities and availment of credits under the Central Excise Tariff Act, 1985.
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