Whether Explanation to Rule 57A of Central Excise Rules, 1944 substituted by Notification No. 197/86, dated 14-3-1986 can be given retrospective effect - Regarding - Central Excise - 6/89

Whether Explanation to Rule 57A of Central Excise Rules, 1944 substituted by Notification No. 197/86, dated 14-3-1986 can be given retrospective effect - Regarding Circular No. 6/89 Dated 21-3-1989 [From F. No. 267/119/87-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Whether Explanation to Rule 57A of Central Excise Rules, 1944 substituted by Notification No. 197/86, dated 14-3-1986 can be given retrospective effect - Regarding. I am directed to say that doubts have been raised whether the explanation to Rule 57A of the Central Excise Rules, 1944 substituted by Notification No. 197/86, dated 14-3-1986 will be effective from the date of its issue or can be given retrospective effect from 1-3-1986 itself (i.e., when Rule 57A come into force). The matter has been examined by the Board. It has been observed that even without the explanation aforesaid, Modvat credit is admissible under Rule 57A on inputs which are manufactured and used captively in any factory provided such inputs and final products are specified under Notification No. 177/86, dated 1-3-1986. The Explanation aforesaid any makes explicit beyond doubt what was already provided for by the unamended rule. Earlier also, after consultation with the Law Ministry, similar explanation inserted in Rule 56A vide Notification No.118/80, dated 9-7-1980 was given retrospective application. It has therefore been decided that Modvat credit will be admissible on the inputs manufactured in a factory and captively used for manufacture of final product right from the inception of Rule 57A i.e., from 1-3-1986 itself. This disposes of The Collector of Central Excise, Calcutta-II's letter of F. No. IV(16)12-CE/PRO/CAL-II/87, dated 30-11-1987 and the Collector of Central Excise, Madras's C. No. III/10/150/88, dated 21-4-1988. Pending cases may be settled accordingly. Field formations may be suitably informed. Receipt of this letter may please be acknowledged.