Appeal allowed for retrospective application of Cenvat Credit Rules amendment

The appeal was allowed in favor of the appellant regarding the retrospective application of Rule 6 of the Cenvat Credit Rules 2004, as amended on 31.12.2008. The Member (Judicial) held that the amendment should be construed as retrospective based on previous decisions and the judgment of the Hon'ble Karnataka High Court. The issue had been settled in various judicial forums, leading to the conclusion that the appellant was entitled to the benefit provided in the amended rule for supplying goods to SEZ developers during the disputed period from April 2007 to December 2008.

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Issues:
Retrospective application of Rule 6 of the Cenvat Credit Rules 2004 amended on 31.12.2008.

Analysis:
The appeal was filed against an order passed by the Commissioner of Customs and Central Excise (Appeals), Jaipur. The appellant, engaged in manufacturing electrical copper wires & cables, availed cenvat credit of Central Excise duty paid on inputs. During the disputed period from April 2007 to December 2008, the appellant cleared excisable final products to the SEZ developer without paying Central Excise duty. The Central Excise Department considered this as exempted goods and raised a demand against the appellant.

The appellant's advocate argued that the SEZ developer's inclusion in Rule 6 of the Cenvat Credit Rules 2004 on 31.12.2008 should have a retrospective effect. Citing judgments from various courts and tribunals, the advocate contended that the benefit provided in the amended rule should apply to the appellant for supplying goods to SEZ developers during the disputed period.

The Revenue's representative reiterated the findings of the impugned order. After hearing both sides and examining the records, the Member (Judicial) noted that the issue of retrospective application of Rule 6, as amended in 2008, had been settled in previous decisions. Referring to the judgment of the Hon'ble Karnataka High Court in the case of Fosroc Chemicals (India) Pvt. Ltd., the Member concluded that the amendment should be construed as retrospective. As the issue was no longer res-integra and had been addressed in various judicial forums, the Member found no merit in the impugned order and allowed the appeal in favor of the appellant.

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