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Issues involved: Interpretation of retrospective effect of Notification No. 28/95-C.E. (N.T.) on MODVAT Credit availed by a Public Sector Unit.
Summary: The Appellate Tribunal CEGAT, Chennai considered the appeal of a Public Sector Unit regarding the rejection of MODVAT Credit amounting to Rs. 8,43,790/- by the Commissioner (Appeals). The issue revolved around the time limit of six months introduced by Notification No. 28/95-C.E. (N.T.) and its retrospective effect on the credit availed before the notification. The appellant argued that the time limit should not apply retrospectively, citing precedents such as Gujarat State Fertilizers v. CCE and India Foils Ltd. v. CCE. The appellant's counsel contended that MODVAT Rules are independent and comprehensive, not subject to the time limit under Section 11A of the Act. The Departmental Representative reiterated the authorities' view. Upon review, the Tribunal found that the judgments cited by the appellant were applicable to the case. It was observed that the credit was taken before the introduction of the six-month time limit specified in the notification. Relying on the precedents, the Tribunal concluded that the notification did not have retrospective effect, and therefore, the appellant's action of taking credit beyond six months was justified. Consequently, the impugned order was set aside, and the appeals were allowed with any consequential relief.
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