9911796707
TMI Blog2022 (3) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit given under amended Rule 3(5) of the said Rules for depreciation of the capital goods would, in effect, have retrospective operation. Rule 3(5) of the said Rules of 2004 could have been seen to have been arbitrary in not making a distinction between the quantum of Cenvat credit that ought to be refunded by an assessee who intended to sell any capital goods for which Cenvat credit which had been obtained, within a short time of the acquisition of capital goods or after long years of use thereof. The distinction was brought about and the remission, so to say, was provided in the amended Rule 3(5) of the said Rules in 2007 - it is correct in interpreting the benefit conferred by the amendment to Rule 3(5) to have retrospective operation even if the demand for the refund of the Cenvat credit obtained for the capital goods had been raised prior to the amendment of 2007. Exemption that the appellant is entitled to by reason of the location of its manufacturing facility - HELD THAT:- What the assessee says is that if it was liable in a month to pay ₹ 100 on account of the excise duty it would be entitled to get refund of such amount of ₹ 100 the next month and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its manufacturing unit that produces ferro silicate components which attract excise duty. However, by reason of the location of the manufacturing unit, the assessee is entitled to refund of the excise duty to the extent paid. The appellant was also entitled to obtain Cenvat credit for acquisition of capital goods used in its process of manufacture. However, in terms of Rule 3(5) of the Cenvat Credit Rules, 2004, as such Rule stood at the relevant time, when any capital goods had been acquired and Cenvat credit obtained, if such capital goods were subsequently to be sold or transferred, the Cenvat credit had to be refunded. 4. Under the practice that was followed for the assessee to obtain the refund of the excise duty paid, it would first adjust the quantum of excise duty payable against any Cenvat credit in the assessee s account; and the balance amount of the duty would be paid in cash. A return would be filed by the assessee at the end of each month. Upon scrutiny of the return, the amount of excise duty paid in cash would be refunded to the assessee by the concerned Assistant Commissioner. 5. As regards the acquisition of any capital goods upon obtaining Cenvat credit, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the acquisition of the capital goods. 8. In the present case, upon the assessee using the Arc Furnace for a considerable period of time, it desired to replace the same or, at any rate, to sell or transfer the same; whereupon the assessee was required to refund in cash the entire quantum of Cenvat credit that it had obtained at the time of the acquisition of the Arc Furnace. There is no dispute that such refund was made in cash. However, according to the Department, the assessee acted in a mischievous manner by incorporating the amount of Cenvat credit refunded in respect of the Arc Furnace in its return at the end of the month. The Department claims that the Assistant Commissioner, in his mistaken belief that the money that had been paid and indicated in the return was in connection with the duty on the manufactured goods of the assessee, refunded back the Cenvat credit obtained in respect of the Arc Furnace. A few months down the line, the alleged mistake was noticed and a show-cause notice was issued to the assessee as to why the amount should not be refunded by the assessee. For such purpose, Section 11A of the Central Excise Act, 1944 was pressed into service to demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee earlier, the Tribunal at various places and some High Courts have taken a view that the benefit given under amended Rule 3(5) of the said Rules for depreciation of the capital goods would, in effect, have retrospective operation. For such purpose, the assessee relies on a judgment of the Principal Bench of the Tribunal reported at 2013 (298) ELT 541 which accepted a view expressed by the Madras High Court in a decision reported at 2011 (264) ELT 367. 14. Amendments to enactments or rules or instructions sometimes bring about an altered situation or, at times, may be clarificatory in nature. When an amendment is clarificatory, then such amendment has to be read into the provision sought to be amended as if it was included therein from the inception of such provision. In the present case, despite the use of the expression as such in original Rule 3(5) of the said Rules of 2004, no remission was given as to the quantum of refund of the Cenvat credit earlier availed of by taking into account the tenure of use of the capital goods. Plainly, it was irrational. The usual wear and tear of any goods would diminish its value, as the rule of depreciation instructs, up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantum of credit which the assessee had obtained is lost forever to the assessee. What the assessee suggests is that the Cenvat credit given for acquisition of capital goods to a manufacturer, who is otherwise exempted from paying excise duty on its manufactured products, is revenue neutral. There is considerable force in such contention that when a manufacturer is entitled to refund of the entire excise duty, the refund to the Department of any adjusted Cenvat credit availed of would again have to be refunded by the Department by virtue of the exemption to which the assessee is entitled to. 18. The third aspect the most important ground urged on behalf of the assessee goes to the root of the matter does not appear to have been considered by the Tribunal in the impugned judgment and order dated January 16, 2020. 19. The Department, fairly, accepts that the matter may require fresh consideration. Accordingly, the judgment and order of the Tribunal dated January 16, 2020 is set aside. The order of the adjudicating authority that was carried to the Tribunal is also set aside. 20. However, without the remanding the matter to the Tribunal, it is deemed fit and proper to rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
