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2019 (7) TMI 1089 - HC - Central ExciseEffect of amendment/substitution in the Rule 6(6)(i) of CENVAT Credit Rules, 2004 - substitution/supersession of the rule - substitution of Rule 6(6)(i) of CENVAT Credit Rules, 2004 by the Notification No.50/2008-C.E.(N.T.) dated 31.12.2008 - retrospective effect or not - HELD THAT - The present appeal filed by the Revenue is without any merit and is liable to be dismissed. Appeal dismissed - decided against Revenue.
Issues:
1. Interpretation of the retrospective effect of the substitution of Rule 6(6)(i) of CENVAT Credit Rules, 2004. 2. Application of excise duty exemption to SEZ Units and Developers. 3. Relevance of Circular No.29/2006-Cus regarding SEZ provisions. 4. Consideration of judgments from Karnataka High Court in similar cases. Issue 1: Interpretation of Retrospective Effect of Rule Substitution The judgment refers to a recent decision by a Coordinate Bench of the Madras High Court regarding the substitution of Rule 6(6)(i) of CENVAT Credit Rules, 2004 by Notification No.50/2008-C.E.(N.T.). The Coordinate Bench held that the substitution was clarificatory and should be given retrospective effect. The judgment cites the distinction between 'substitution' and 'supersession' as explained by the Hon'ble Supreme Court in a previous case. It clarifies that substitution results in the repeal of the earlier provision and its replacement by the new provision. The judgment emphasizes that the intention behind the substitution was to make the new rule operative, effectively deleting the old rule. Issue 2: Application of Excise Duty Exemption to SEZ Units and Developers The judgment discusses the excise duty exemption available to SEZ Units and Developers. It quotes Circular No.29/2006-Cus, which states that supplies from DTA to SEZ units or developers for their authorized operations inside a SEZ may be treated as exports. The Circular deems existing SEZs to have been notified under the Act, making supplies from DTA to SEZ exempt from Central Excise duty. The judgment aligns with previous decisions regarding the applicability of excise duty exemptions to SEZs. It mentions that decisions in similar cases are pending before the Supreme Court and the Tribunal. Issue 3: Relevance of Circular No.29/2006-Cus Regarding SEZ Provisions The judgment highlights the significance of Circular No.29/2006-Cus issued by the Central Board of Excise & Customs concerning the implementation of the Special Economic Zone Act, 2005. The Circular renders certain provisions redundant and exempts supplies from DTA to SEZ from Central Excise duty. It emphasizes the applicability of provisions related to exports under the Central Excise Act, 1944 to SEZ units and developers procuring goods from DTA for authorized operations. Issue 4: Consideration of Judgments from Karnataka High Court The judgment mentions other judgments from the Karnataka High Court, specifically "Commissioner of Central Excise & Sales Tax, Bangalore -Vs- Fosroc Chemicals (India) Pvt.Ltd." and "Commissioner of Central Excise Bangalore-II -Vs- ECIE Impact Pvt Ltd." The presence of these judgments, along with the decision of the Coordinate Bench of the Madras High Court, strengthens the dismissal of the appeal filed by the Revenue. The judgment concludes that the appeal lacks merit and should be dismissed, citing the lack of costs associated with the decision. This comprehensive analysis of the judgment provides a detailed understanding of the issues involved and the court's decision on each aspect.
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