2019 (6) TMI 322 - AT - Central Excise

Effective date of the notification - Wrong availment and utilization of CENVAT Credit of Education Cess (EC) and Secondary Higher Education Cess (SHEC) - credit availed on or after 01.03.2015 but before the issue of notification 12/2015-CE (NT) dated 30.04.2015 - Rule 3(7)(b) of Cenvat Credit Rules, 2004 - HELD THAT - The notification does not indicate that it is intended to have retrospective application. It is now well settled legal principle that all fiscal statutes and provisions should be treated as if they have only prospective application unless the law specifically indicates otherwise. In this case, not only does the notification not indicate that it will have retrospective application, it also states specifically that it shall come into force from the date of publication in the official gazette which is 30.04.2015. Therefore, the unamended provisions of Rule 3(7)(b) apply prior to 30.04.2015, according to which the appellant could not have utilized Cenvat Credit of EC SHEC towards payment of Basic Excise Duty. After this date, they could have taken credit of the inputs or capital goods received in the factory on any day after 01.03.2015 and utilize it for the payment of Basic Excise Duty. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Interpretation of notification 12/2015-CE (NT) dated 30.04.2015 regarding the utilization of Cenvat Credit of Education Cess (EC) and Secondary & Higher Education Cess (SHEC) for payment of Basic Excise Duty.
2. Whether the notification has retrospective application or not.

Analysis:

Issue 1: Interpretation of notification 12/2015-CE (NT) dated 30.04.2015
The appeal revolved around the interpretation of notification 12/2015-CE (NT) dated 30.04.2015, which amended Rule 3(7)(b) of the Cenvat Credit Rules, 2004. The notification allowed for the utilization of credit of EC & SHEC paid on inputs or capital goods received after 01.03.2015 for the payment of Basic Excise Duty. The appellant contended that the notification permitted such utilization even before its issuance date, while the revenue argued that the notification's effect was only from the date of publication in the official gazette, i.e., 30.04.2015. The Tribunal analyzed the wording of the notification and held that it did not indicate any retrospective application. The Tribunal emphasized that fiscal statutes are generally prospective unless expressly stated otherwise. Therefore, the unamended provisions of Rule 3(7)(b) applied before 30.04.2015, disallowing the utilization of EC & SHEC credit for Basic Excise Duty. Post this date, the utilization was permissible for inputs or capital goods received in the factory after 01.03.2015.

Issue 2: Retrospective application of the notification
The Tribunal deliberated on whether the notification had retrospective application. It noted that the notification explicitly stated that it would come into force from the date of publication in the official gazette, which was 30.04.2015. The appellant argued that even though the notification was issued on 30.04.2015, its effect could be traced back to 01.03.2015. However, the Tribunal reiterated that the absence of any indication of retrospective application in the notification, coupled with the specific mention of its enforcement date, meant that the notification operated prospectively. Consequently, the Tribunal upheld the lower authorities' decision, affirming the demand raised against the appellant for wrongly utilizing EC & SHEC credit towards Basic Excise Duty before 30.04.2015.

In conclusion, the Tribunal dismissed the appeal, upholding the Order-in-Original and rejecting the appellant's contentions regarding the utilization of Cenvat Credit of EC & SHEC for Basic Excise Duty prior to the issuance date of the amending notification. The judgment clarified the prospective application of fiscal statutes and underscored the importance of explicit language indicating retrospective effect in legal provisions.