9911796707
TMI Blog2016 (9) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... shed goods to M/s PPPL after discharging central excise duty liability. They also availed CENVAT credit on the invoices issued by M/s PPPL as Input Service Distributor (ISD). The department entertained the view that appellant being only a job worker to the principal manufacture viz: M/s PPPL, and being a totally independent entity from M/s PPPL, the appellant cannot avail CENVAT credit on the input invoices issued by M/s PPPL. Show cause notices were issued to the appellant proposing recovery of duty along with interest and for imposition of penalties. The details of the different show cause notices, the period involved and the duty demanded are stated in the following table below: Appeal No. E/27077/13 E/27078/13 E/30012/15 Demand (duty) Rs.4,65,532/- Rs,14,49,469/- Rs.7,32,809/- Penalty Rs.4,65,532/- Rs.14,49,469/- Rs.7,32,809/- Period July, 2001 to May, 2012 Aug, 2005 to June, 2011 July, 2013 to Nov, 2013 SCN date 13.09.2012 21.02.2012 19.02.2014 O-i-O DATE 30.10.2012 19.10.2012 29.04.2014 O-i-A DATE 30.03.2013 30.03.2013 16.10.2015 After adjudication the original authority confirmed the recovery of CENVAT credit wrongly availed on invoices along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to job workers/contract manufacturers who manufacture goods including outsourced manufacturing unit. That this amendment is made by "substitution" of existing Rule 7 of CENVAT Credit Rules, 2004. That this amendment is made only to correct the mistake/lacuna in the earlier rule and hence the same would have retrospective effect from the inception of CCR, 2004 (i.e. 10.09.2004). "Substitution" of any rule or any notification or any parts thereof would have retrospective effect from the date of incorporation of such rule or notification in the statute. To support this contention the learned counsel relied upon the following judgments; a) Indian tobacco Association [2005 (187) ELT 162 (SC)] b) Zile Singh v/s State of Haryana & Others c) Steel Authority of India Ltd., [2013 (297) ELT 106 (Chhat)] d) Fosroc Chemicals (India) [2015 (318) ELT 240 (Kar)] e) Mohan clothing co. Pvt. Ltd., [2011 (273) ELT 563 (T)] 4. The learned counsel also put forward arguments raising the issue of limitation. In appeal no. E/27078/2013 the period Involved is from August, 2005 to June, 2011. The show cause notice is issued on 21.02.2012 which makes the period involved fully within the extended pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature intented the amendment to apply retrospectively, the same would have been specifically stated in the amendment itself. That therefore the appellants cannot be considered as manufacturing units of M/s PPPL. It was also argued that the appellant had supressed the facts regarding the availment of CENVAT Credit on invoices issued by M.s PPPL and therefore the extended period of 5 years has been rightly invoked and the equal amount of penalty imposed in right and proper. 6. I have heard both sides and perused the records carefully. 7. The issue involved is whether the appellant is eligible to avail the CENVAT Credit of input service distributed by the M/s PPPL as an input service distributor. For better appreciation, Rule 7 of CCR, 2004 during relevant period is extracted as under: Rule 7. Manner of distribution of credit by input service distributor. - The input service distributor may distribute the CENVAT credit in respect of the services tax paid on the input service to its manufacturing units or units providing output service, subject to the following conditions, namely:- (a) The Credit Distributed against a document referred to in rule 9 does not exceed the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput service distributor has to distribute the credit to 'its manufacturing units'. The manufacturing units of the appellants are not that of M/s. Merck Specialties Ltd. and these units belong to the appellants and therefore, M/s. Merck cannot distribute Cenvat credit to the appellants under Rule 7 of CCR, 2004 as aforesaid. The expression 'its manufacturing unit' specified under Rule 7 has to be interpreted in terms of the ratio of the decision of the Tribunal in the case of Panasea Biotec Ltd. (cited supra). In that case, for availing the benefit of Notification 23/98-Cus., a condition was prescribed that the importer should utilise the imported bulk drugs in the manufacture of life saving drugs in his factory. A question arose whether 'his factory' would include factory of job-worker and it was held that job-workers' factory will not come within the purview of 'his factory' mentioned in the said notification. In the present case, the expression used is "its manufacturing unit". The said expression would mean that the manufacturing unit of the input service distributor and not that of the job-worker and, therefore, the contention of the appellants that they are eligible for the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the ratio laid in the above judgment I am able to conclude that appellant cannot be considered as a manufacturing unit of input service distributor, M/s PPPL, for the purpose of availing CENVAT Credit on input invoices issued by M/s PPPL. 10. The second contention raised by the appellant is that the amendment brought forth to Rule 7 with effect from 01.04.2016 being a 'substitution' has to be applied retrospectively. At the outset, it has to be stated that there is nothing in the amendment which says that the amendment is to apply retrospectively. The learned counsel has relied on various judgements as stated above to put forth the argument that when an amendment to argue that when amendment is introduced by 'substitution' is has to be inferred that the amendment will apply retrospectively. In the case laws relied by the Learned Counsel for appellant the 'substitution' brought forth were held to be having retrospective application merely because those substitutions were clarificatory in nature, to correct obvious mistake or to remove discrimination. In the case before me, the amendment does not appear to be clarificatory or for correcting any obvious mistake or for removi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
