Tribunal grants stay on demand pending appeal, refers matter for Larger Bench decision on Rule 6(6)(i) amendment.

The Tribunal granted the appellants' application for stay, waiving the demand under the impugned order until the appeal's disposal. The matter was referred to the President for constituting a Larger Bench to conclusively determine whether the amendment to Rule 6(6)(i) of the Cenvat Credit Rules was clarificatory and retrospective in operation.

---

---

Issues involved:
1. Interpretation of Notification No. 50/2008-C.E. (N.T.) regarding Cenvat Credit Rules.
2. Applicability of cenvat credit on goods cleared without payment of duty to SEZ developers.
3. Whether the amendment to Rule 6(6)(i) of the Cenvat Credit Rules is clarificatory and retrospective.

Analysis:
1. The appeal stemmed from the Commissioner (Appeals) decision on the penalty amount reduction for the appellants who had cleared goods to SEZ developers without duty payment. The issue revolved around the applicability of Rule 6(3)(b) of the Cenvat Credit Rules, 2004 and Section 11A of the Central Excise Act, 1944. The appellants contested the penalty amount, leading to the present appeal.

2. The appellants argued for cenvat credit entitlement based on Notification No. 50/2008-C.E. (N.T.) and the amendment to Rule 6(6)(i). They highlighted the retrospective amendment's impact on their case, citing the decision in Sujana Metal Products Ltd. v. CCE, Hyderabad. The argument focused on the availability of cenvat credit for duty paid on inputs used in goods supplied to SEZ developers under SEZ Act, 2005 and SEZ Rules, 2006.

3. The dispute centered on whether the amendment to Rule 6(6)(i) was clarificatory and retrospective. The appellants contended that the amendment should be considered clarificatory, emphasizing Circular No. 29/2006-Cus. and the benefits provided under the amendment. The Tribunal's decision in Sujana Metal Products was referenced, which viewed the amendment as clarificatory. However, the Tribunal in the present case was not persuaded by this view and decided to refer the matter to a Larger Bench for a conclusive decision on the issue.

4. The Tribunal acknowledged the appellants' reference to an order by the Commissioner of Central Excise, Rohtak, in a related matter. While the department had not challenged this order, the Tribunal noted that the Deputy Commissioner's confirmation lacked authority without the Board's approval. Additionally, the Tribunal considered the absence of a challenge by the department against the Tribunal's decision in Sujana Metal Products, indicating a prima facie case for granting a stay on the demand made under the impugned order.

5. Ultimately, the Tribunal granted the application for stay, waiving the demand under the impugned order until the appeal's disposal. The matter was directed to the President for constituting an appropriate Larger Bench to determine definitively whether the amendment to Rule 6(6)(i) was clarificatory and retrospective in operation.

---