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2017 (11) TMI 820 - AT - Central ExciseCENVAT credit - applicability of Rule 6(3)(b) of Cenvat Credit Rules 2004 - amendment to Rule 6(6) of the CCR 2004 by N/N. 50/2008 CE dated 31.12.2008 - retrospective effect or prospective effect? - Held that - reliance placed in the case of CCE Vs. Fosroc Chemicals (India) Pvt. Ltd. 2014 (9) TMI 633 - KARNATAKA HIGH COURT , where it was held that amendment has to be construed as retrospective in nature and the benefit of Rule 6(6)(1) as amended in 2008 has to be extended to the goods cleared to a developer of a Special Economic Zone for their authorized operations - appeal allowed - decided in favor of appellant.
Issues:
- Whether the appellants are liable to pay 10% of the total price of exempted goods due to not maintaining separate accounts for inputs used in the manufacture of excisable goods cleared without payment of duty to SEZ as required under Cenvat Credit Rules, 2004. - Whether the goods cleared to SEZ Developer without payment of duty are exempted goods within the meaning of Rule 2(d) of the Cenvat Credit Rules, 2004. - Whether the amendment to Rule 6(6) of the Cenvat Credit Rules 2004 by Notification No.50/2008 CE dated 31.12.2008 should be given retrospective effect. - Whether the impugned order is sustainable in law. Analysis: 1. The appeal was directed against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal. The appellants were engaged in the manufacture of excisable goods and were not maintaining separate accounts for inputs used in the manufacture of goods cleared without payment of duty to SEZ, as required by Cenvat Credit Rules, 2004. The issue revolved around the requirement to pay 10% of the value of exempted goods under Rule 6(3)(b) of Cenvat Credit Rules, 2004, for the period up to 31.03.2008, and subsequent requirements effective from 01.04.2008. The appellants were alleged to have not followed these requirements from 14.02.2007 to 30.12.2008. 2. A show-cause notice was issued proposing to recover an amount due to the above non-compliance. The original authority confirmed the demand, leading to the appellant filing an appeal before the Commissioner, who also rejected the appeal. The appellant argued that the goods cleared to SEZ Developer were not exempted goods under Rule 2(d) of the Cenvat Credit Rules, 2004, and that the amendment to Rule 6(6) should be given retrospective effect from the inception of the Cenvat Credit Rules, 2004. 3. The appellant cited various judicial precedents to support their arguments, claiming that the issue had been settled in their favor by decisions of the Tribunal and High Courts. The appellant contended that the impugned order was not sustainable in law, contrary to binding judicial precedents on the issue. 4. After hearing both parties and considering the submissions, the Tribunal found that the issue was settled in favor of the appellant by various decisions of the Tribunal and High Courts. The Tribunal, following the decisions of the jurisdictional High Court, concluded that the impugned order was not sustainable in law. Consequently, the Tribunal set aside the impugned order and allowed the appeal of the appellant. This comprehensive analysis of the judgment covers the issues involved and the detailed reasoning behind the decision rendered by the Tribunal.
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