Transitional CENVAT credit and fresh show-cause allegations cannot be withdrawn or added retrospectively without clear authority and limitation compliance.

CENVAT credit under the transitional job-work regime was treated as admissible after omission of Rule 12B of the Central Excise Rules, 2002, because the withdrawal of the special procedure was read as not retrospectively taking away a facility already availed absent clear legislative intent; the assessee therefore succeeded on the credit issue. A later addendum to the show cause notice introducing a fresh allegation of fraudulent availment on the basis of fake invoices was held unsustainable, as it was a new ground requiring independent compliance with the limitation requirements for a demand notice under the Central Excise Act; the assessee also succeeded on this procedural issue.

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Issues: (i) Whether CENVAT credit could be validly availed during the period after omission of Rule 12B of the Central Excise Rules, 2002; (ii) Whether the addendum to the show cause notice was legally sustainable.

Issue (i): Whether CENVAT credit could be validly availed during the period after omission of Rule 12B of the Central Excise Rules, 2002.

Analysis: Rule 12B had provided a special job-work procedure for textile traders and the accompanying facility was withdrawn by the amending notification. The governing circular issued by the departmental authority treated the omission as a transitional issue and clarified that persons who had operated under the erstwhile rule could continue to clear goods lying with them, including for export, and that the job worker was not to bear the duty burden. The reasoning was supported by earlier tribunal and High Court decisions recognising that a statutory facility already availed cannot be taken away retrospectively unless the law clearly so provides.

Conclusion: CENVAT credit was held to be admissible for the disputed period, in favour of the assessee.

Issue (ii): Whether the addendum to the show cause notice was legally sustainable.

Analysis: The addendum introduced a fresh allegation of fraudulent availment on the basis of fake or bogus invoices, which was not part of the original notice. Such a new ground required separate invocation within the period prescribed under Section 11A of the Central Excise Act, 1944. As the addendum was issued long after the original notice and beyond the permissible period, it could not be sustained either on limitation or on merits of procedure.

Conclusion: The addendum was held to be unsustainable, in favour of the assessee.

Final Conclusion: The demand and consequential confirmation against the appellant were set aside and the appeal succeeded.

Ratio Decidendi: A statutory credit-linked facility already accrued under a transitional job-work regime cannot be denied retrospectively in the absence of clear authority, and a later addendum introducing a new allegation must independently satisfy the statutory limitation for issuance of a demand notice.

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