Retrospective amendment to Cenvat refund rules made input service credit refund admissible for manufacture-related use.

Retrospective amendment to Notification No. 5/2006-C.E. (N.T.) expanded the relevant expression to "used in or in relation to", and this removed the of the first appellate authority's contrary view. The Tribunal treated the matter as no longer res integra and followed its earlier decision to hold that refund of Cenvat credit of Service Tax paid on input and input services used in manufacture of final products was admissible. The impugned order was therefore set aside in favour of the assessee.

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Issues: Whether refund of Cenvat credit of Service Tax paid on input and input services used in the manufacture of final products was admissible in view of the retrospective amendment to Notification No. 5/2006-C.E. (N.T.).

Analysis: The dispute was held to be covered by the retrospective amendment made by Notification No. 7/2010-C.E. (N.T.), dated 27-2-2010, whereby the expression restricting use was substituted by the broader expression "used in or in relation to". The amendment under the Finance Act, 2010, was treated as removing the basis of the first appellate authority's view. The issue was also considered no longer res integra and covered by the Tribunal's earlier decision.

Conclusion: Refund of the Cenvat credit was admissible, and the impugned order was set aside in favour of the assessee.

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