Retrospective excise amendment regularised input credit on wire rods, so the demand was not restored.

A retrospective amendment to Rule 16 of the Central Excise Rules, 2002, read with the clarificatory circular issued under the Taxation Laws (Amendment) Act, 2006, was treated as regularising credit taken on wire rods used in converting wires. The Tribunal view was that the amendment and clarification covered credit availed at the input stage in the relevant excise process, so there was no basis to disturb the Commissioner (Appeals)' order. On that reasoning, the demand was not restored and the Revenue's challenge failed.

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Issues: Whether the demand relating to credit on wire rods used in conversion of wires was liable to be sustained in view of the retrospective amendment to Rule 16 of the Central Excise Rules, 2002 and the clarificatory circular issued under the Taxation Laws (Amendment) Act, 2006.

Analysis: The appeal turned on the effect of the retrospective amendment to Rule 16, which was treated as a measure intended to regularise availment of credit in relation to wire rods and drawn wire. The earlier Tribunal view on the identical issue had held that the amendment and the Board's clarification covered the situation where credit had been taken at the input stage and the duty position had been regularised by the amendment. In that light, no contrary basis was found to disturb the order of the Commissioner (Appeals).

Conclusion: The demand was not required to be restored and the Revenue's challenge failed.

Final Conclusion: The order of the Commissioner (Appeals) was sustained and the Revenue's appeal stood rejected.

Ratio Decidendi: A retrospective amendment enacted to regularise credit already availed in a specified excise process must be given effect so as to uphold the regularisation and deny restoration of the demand inconsistent with that amendment.

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