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2017 (9) TMI 289 - AT - Central ExciseCENVAT credit - services provided to SEZ - case of appellant is that Rule 6(6)(A) was given a retrospective effect from 10.02.2006 by virtue of Finance Act 2012. He pointed out that the period involved in this case is September 2004 to March 2008 and therefore the period from 10.02.2006 onwards is covered by the retrospective amendment and Rule 6(6)(A) of the CCR - Held that - While interpreting the fact that Rule 6(6)(i) of Cenvat Credit Rules was amended by way of substitution, it was held that the same can be deemed to have a retrospective effect under certain circumstances. Consequently, it was held that the said sub-rule would be applicable with effect from 10.09.2004 when the Cenvat Credit Rules came into existence. It is however, seen that Rule 6(6)(A) was not introduced by way of substitution but it was a new Rule inserted in the Cenvat Credit Rules, 2004. There is no basis for extending the benefit of such insertion for period prior to 10.02.2008 - penalty and interest is consequently reduced - appeal allowed - decided partly in favor of appellant.
Issues:
Denial of cenvat credit for services provided to SEZ. Analysis: The appellant's appeal against the denial of cenvat credit for services provided to SEZ was examined. The appellant argued that Rule 6(6)(A) was given retrospective effect from 10.02.2006 by the Finance Act 2012. Referring to the case of Sujana Metal Products, it was highlighted that the SEZ Act provisions have an overriding effect, and the amendment to Rule 6(1) of the CCR, 2004 by Notification No. 50/2008-C.E. (N.T.) applies from 10-9-2004. The decision in Sujana Metal Products was upheld by the High Court of Andhra Pradesh. The respondent relied on the impugned order, distinguishing it from the case of Sujana Metal Products on the grounds of different sub-rules. The Tribunal's detailed examination in Sujana Metal Products concluded that supplies to SEZ units are to be treated as export, and the provisions of Cenvat Credit Rules for recovery of amounts do not apply. The Tribunal upheld the appeals of the assessees and rejected the Department's appeals. The Tribunal observed that the decision in Sujana Metal Products focused on the interpretation of the SEZ Act's definition of export and the overriding effect of Section 51. It was noted that the amendment to Rule 6(6)(i) of the CCR, 2004 by substitution could have retrospective effect under certain circumstances. However, Rule 6(6)(A) was a new Rule inserted in the Cenvat Credit Rules, 2004, with retrospective effect from 10.02.2008 by the Finance Act 2012. Therefore, the benefit of this insertion was not extended to the period before 10.02.2008. The appeal was allowed for the period after 10.02.2008, resulting in a reduction of penalty and interest. In conclusion, the appeal was partly allowed, with the Tribunal providing a detailed analysis of the retrospective application of Rule 6(6)(A) and its implications on cenvat credit for services provided to SEZ units. The judgment highlighted the significance of statutory provisions, retrospective amendments, and judicial interpretations in resolving the issue of denial of cenvat credit.
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