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TMI Blog2021 (2) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... ersal of CENVAT Credit in terms of Rule 6 of CENVAT Credit Rules, 2004. The appellants were not maintaining separate records of receipt, consumption of inventory of inputs and input services in terms of Rule 6(2) of CENVAT Credit Rules, 2004 and therefore, they opted to pay CENVAT Credit as determined under Rule 6(3A) of CENVAT Credit Rules, 2004 in terms of Rule 6(3)(ii) of CENVAT Credit Rules, 2004. The appellants were from time to time reversing the credit as prescribed under Rule 6(3A) in terms of formula prescribed therein. The appellants were submitting the detailed calculation on said reversal to the Revenue from time to time on annual basis. Learned Counsel pointed out that the amount of reversal was calculated by them in terms of Rule 6(3A)(c)(iii). He pointed out that the said clause (c) of sub-rule 3A of Rule 6 reads as under: "(c) the manufacturer or the provider of output service shall determine finally the amount of CENVAT credit attributable to exempted goods and exempted services for the whole financial year in the following manner, namely :- (i) the amount of CENVAT credit attributable to inputs used in or in relation to manufacture of exempted goods, on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2020 (3) TMI 523-CESTAT-CHENNAI. 5. He further pointed out that Rule 6(3A) was subsequently amended by Notification No. 13/2016-CE (NT) dated March 01, 2016. The said amendment also confirmed the stand taken by the appellant that only a part of the common CENVAT Credit is to be reversed and not full CENVAT Credit. He pointed out that while issuing the said notification, the CBEC also clarified vide DOF No. 334/8/2016-TRU dated February 29, 2016 that the said rule has been redrafted with the objective of simplifying and rationalizing the same without altering the established principle of reversal of said Credit. 6. He further pointed out that they were from time to time on monthly basis were reversing the credit in terms of Rule 6(3A) and submitting the same to the Revenue. He pointed out that extended time of limitation has been invoked while stand of the appellant was known to the department during the entire period and therefore, there was no intention of the appellant to evade or suppress any information from the Revenue. In view of the above, learned Counsel argued that the said order needs to be set aside and appeal allowed. 7. Learned Authorised Representative relies on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 01.3.2016, which is reproduced:- RULE 6. [Obligation of a manufacturer or producer of final products and a provider of output service]. 6. (1) The CENVAT credit shall not be allowed on such quantity of input used in or relation to the manufacture of exempted goods or for provision of exempted services, on input service used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services], except in the circumstances mentioned in sub-rule (2): [Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs used in the manufacture of goods cleared without payment of duty under the provision of that rule.] (2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for- (a) the receipt, consumption and inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation. I - If the manufacturer of goods or the provider of output service, any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided him, and such option shall not be withdrawn during the remaining part of the financial year. [Explanation II-For removal of doubt, it is hereby clarified that the credit shall not be allowed on inputs used exclusively in or in relation to the manufacture of exempted goods or for provision of exempted services and on input services used exclusively in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services. [Provided *also that in case of transportation of goods or passengers by rail the amount required to be paid under clause (i) shall be an amount equal to 2 per cent of value of the exempted services.] Explanation I-If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided plus the total value of exempted goods manufactured and removed during the preceding financial year, F denotes total value of output and exempted services provided, and total value of dutiable and exempted goods manufactured and removed, during the preceding financial year, and G denotes total CENVAT credit taken on input services during the month; (c) the manufacturer of goods or the provider of output 'service, shall determine finally the amount of CENVAT credit attributable to exempted goods and exempted services for the whole financial year in the following manner, namely:- (i) the amount of CENVAT credit attributable to inputs used, in or in relation to manufacture of exempted goods, on the basis of total quantity of Inputs used in or in relation to manufacture of said exempted goods, denoted as H; (ii) the amount of CENVAT credit attributable to inputs ,used for provision of exempted services = (J/K) multiplied by L, where J denotes the total value of exempted services provided during the financial year, K denotes the total value of dutiable goods manufactured and removed plus the total value of output services provided plus the total value of exempted service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , (iv) interest payable and paid, if any, on the amount short-paid, determined as per condition (e), and (v) credit taken on account of excess payment, if any, determined as per condition (f); (h) where the amount equivalent to CENVAT credit attributable to exempted goods or exempted services cannot be determined provisionally, as prescribed in condition (b), due to reasons that no dutiable goods were manufactured and no 79a[output] service was provided in the preceding financial year, then the manufacturer of goods or the I of output service is not required to determine and pay such amount provisionally for L, month, but shall determine the CENVAT credit attributable to exempted goods or exempted services for the whole year as prescribed in condition (c) and pay the amount so calculated on or before 30th June of the succeeding financial year. (i) where the amount determined under condition (h) is not paid within the said due date i.e., the 30th June, the manufacturer of goods or the provider of output service shall, in addition to the said amount, be liable to pay interest at the rate of twenty four per cent per annum from the due date till the date of payment. 8. From t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services and description of such exempted goods removed and such exempted services provided; (iv) description of inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services and description of such non-exempted goods removed and non-exempted services provided ; (v) CENVAT credit of inputs and input services lying in balance as on the date of exercising the option under this condition; (b) the manufacturer of final products or the provider of output service shall determine the credit required to be paid, out of this total credit of inputs and input services taken during the month, denoted as T, in the following sequential steps and provisionally pay every month, the amounts determined under sub-clauses (i) and (iv), namely :- (i) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate of fifteen per cent. per annum; 10. From the above it can be seen that when anomaly was noticed, the Government has substituted the sub-rule (3A). The legislators very consciously substituted the Rule with intention to give a clarificatory nature to the provision of sub-rule (3A) so as to make it applicable retrospectively. It was all along not the intention of the Government to deny Cenvat credit on the input/ input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub Rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-Rule (3A) shall have retrospective effect being clarificatory." 11. The said decision in the case of Reliance Industries (supra) was challenged by the Revenue before the Hon'ble High Court of Ahmedabad and following questions of law were framed by the High Court: "2. The appellant has proposed the following questions as the substantial questions of law in the appeal (i) Whether the Hon'ble Tribunal, is right to hold that the Notification No. 13/2016 -CE(NT) dated 01.03.2016 ( effective from 01.04.2016) issued by the Government of India, Ministry of Finance, Department of Revenue, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from March 01, 2016, the law has been amended clearly specifying that reversal of CENVAT Credit only on common inputs service is required. While clarifying the said issue, at the time of issue of said amendment, the Government of India vide DOF No. 334/8/2016-TRU dated February 29, 2016 clarified as follows: "(h) Rule 6 of Cenvat Credit Rules which provides for reversal of credit in respect of inputs and input services used in manufacture of exempted goods or for provision of exempted services, is being redrafted with the objective of simplifying and rationalizing the same without altering the established principles of reversal of such credit." 16. From the above, it is apparent that the amendment made is of clarificatory nature and the principles of reversal of credit remains the same. 17. Learned Authorised Representative has relied on the following observation of the Hon'ble Apex Court in Deoki Nandan Aggarwal (supra) : "......It is not duty of the Court to either enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot re-write , recast or reframe the legislation for the very g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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