Clarificatory amendment to Cenvat credit rules applied retrospectively, extending SEZ export benefit to supplies for authorised operations.

Amendment to Rule 6(6)(i) of the Cenvat Credit Rules, 2004 by Notification No. 50/2008-C.E. (N.T.) was treated as clarificatory because the SEZ Act, 2005 regards supplies to a Unit or Developer for authorised operations as exports, and the earlier omission of "developer" created an inconsistency with that regime. On that basis, the substitution was read as removing doubt rather than changing the law, so the amended rule operated retrospectively and the benefit extended to supplies made to an SEZ developer.

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Issues: Whether the amendment to Rule 6(6)(i) of the Cenvat Credit Rules, 2004 by Notification No. 50/2008-C.E. (N.T.) dated 31.12.2008 is clarificatory and retrospective so as to extend the benefit to goods cleared to a developer of a Special Economic Zone for authorised operations.

Analysis: The binding precedent held that the Special Economic Zones Act, 2005 treats supplies to a Unit or Developer for authorised operations as exports, and that the omission of the word "developer" in the unamended rule created an inconsistency with the SEZ regime. The amendment was introduced by substitution to remove that doubt, and was therefore held to be clarificatory in nature. On that basis, the amended rule was read as operating retrospectively and the benefit was extended to supplies made to an SEZ developer.

Conclusion: The issue was answered in favour of the assessee and against the Revenue, and the Revenue's appeal was dismissed.

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