Retrospective excise amendment supports credit on duty paid by wire drawing units for buyers of drawn wire

Retrospective amendment of Rule 16 of the Central Excise Rules, 2002 treated the amount paid by a wire drawing unit as duty, and the corresponding credit was therefore available to the buyer of drawn wire. The discussion concerned stainless steel wires received during June 2003 to November 2003, and the Board clarification supported allowing credit where duty had been paid by the wire drawing unit. On that basis, credit of the duty-paid amount was held admissible to the assessee, and the contrary view was found unsustainable.

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Issues: Whether credit of duty paid on stainless steel wires received by the assessee was admissible in view of the retrospective amendment to Rule 16 of the Central Excise Rules, 2002.

Analysis: The dispute concerned the period June 2003 to November 2003. Rule 16 of the Central Excise Rules, 2002 stood retrospectively amended by Section 39 of the Taxation Laws (Amendment) Act, 2006. The amendment and the Board's clarification indicated that duty paid by wire drawing units was to be treated as duty and the corresponding credit was to be allowed to buyers of drawn wire. On that basis, the amount paid by the wire drawing unit was required to be allowed as credit to the appellant.

Conclusion: Credit was admissible to the appellant, and the contrary view was unsustainable.

Ratio Decidendi: A retrospective amendment that treats the amount paid by the wire drawing unit as duty also entitles the buyer of the wire to corresponding credit of such duty.

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