TaxTMI 
TaxTMI 
2011 (6) TMI 221
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....; The respondent had taken Cenvat Credit of duty paid on wire on the basis of Central Excise invoices issued by the manufacturers of wire from wire rods. During the period from August, 2003 to August, 2004, total Cenvat Credit of Rs.18,59,681/- was taken by the respondent in respect of wires received by them from wire manufacturers. Hon'ble Supreme Court in its judgement dated 27.03.03 in the case of Technoweld Industries reported in 2003(155)ELT209(SC) had held that drawing of wires from wire rods does not amount to manufacture. In view of this judgement of Hon'ble Supreme Court, the department was of the view that since making wire from wire rods did not amount to manufacture and as such no duty was payable on wire drawn from wire rods and what had been paid as Central Excise duty on the clearance of wire, was not Central Excise duty, the respondent were not eligible for Cenvat Credit. It is on this basis that the Show Cause Notice dated 08.09.04 was issued to the respondent for recovery of allegedly wrongly taken Cenvat credit amounting to Rs.18,59,681/- during the period from August, 2003 to August, 2004, under Rule 12 of the Cenvat credit Rule, 2004 rea....
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.... Ld. Counsel for the respondent defending the impugned order pleaded that when the Central Excise duty has been accepted by the jurisdictional Central Excise authorities from the manufacturers of wires, the Cenvat credit cannot be denied to the respondent by the Central Excise authorities having jurisdictional over the respondent by questioning the payment of duty by the manufacturer suppliers of wire, that in this regard reliance is placed on the judgement of the Hon'ble Supreme Court in the case of CCE vs. MDS Sqares Ltd. reported in 2008(229)ELT485(SC) and in the case of Eveready Industries India Ltd. vs. CCE, Allahabad reported in 2000 (120) ELT 379 (Trib), that u/s 5B of Central Excise Act, 1944 where an assessee has paid duty of Central Excise on final product and has been allowed Cenvat credit of duty or tax or Cess paid on goods and input services used in the making of said products, but subsequently the process of making is held by the Court, as not amounting to manufacture and hence not chargeable to excise duty, the Central Govt. may, by notification, provide, for non-reversal of the Cenvat credit allowed to the assessee, subject to such condition as may be s....
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....cular No.831/8/06/CE, dated 26.07.06 has with regard to this retrospective amendment to Rule 16 of the Central Excise Rules, 2002 clarified that retrospective amendment to Rule 16 is aimed at facilitating wire drawing units which had paid a sum equal to the duty leviable on the drawn wire after availing Cenvat credit paid on inputs for the said period, that as per this Circular of the Board in respect of the wire drawing units, during the period of retrospective amendment, i.e., from 29.05.03 on 08.07.04, the sum paid by these units will be treated as payment of duty on drawn wire and shall be allowed as credit to the buyers of the drawn wire, that in this case, the credit has been taken during the period from August, 2003 to 08.07.04, and that therefore, the credit has been correctly availed and as such there is no justification for reversal of the same. He, therefore, pleaded that there is no infirmity in the impugned order. 4. We have carefully considered the submissions from both the sides and perused the records. 5. The period of dispute in this case is from August, 2003 to 08.07.04. The respondent during this period had purchased duty paid copper alloy wire,....
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....plicable on the date of removal and on the value determined u/s 3(2) or the section 4 or 4A of the Central Excise Act, 1944, as the case may be, under Sub-rule (3) of rule 16, if there is a difficulty in following this provision of sub-rule (1), the assessee may receive goods for being re-made, refined or any other reason and may remove said goods subsequently subject to such conditions as may be specified by the Commissioner. By retrospective amendment to sub-rule (3) by section 39 of the Taxable Laws (Amendment) Act, 2006, the following provisions were added to sub-rule (3) with retrospective effect 'provided that for the purpose of this rule 'an assessee shall include wire drawing unit which had cleared the goods on payment of an amount equal to the duty at the rate applicable to drawn wire on the date of removal and on the value determined under relevant provisions of the Act and the rules made thereunder. Provided further that the amount paid under first proviso shall be allowed as Cenvat credit as if others the duty paid by the assessee who removes the goods". The above mentioned retrospective amendment to sub-rule (3) of rule 16 was only for the period from....
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.... the ground of unjust enrichment. I this regard, Board's letter dated 3rd January, 2005 issued vide F.No.139/3/2004-CS.4 may also be referred to. 4.4 The retrospective amendment in Rule 16 is aimed at facilitating 'wire drawing units', which had paid a sum equal to the duty leviable on 'drawn wire' after availing the credit of duty paid on inputs for the said period. It is aimed at regularising availment of credits at two stages and payment of an amount representing duty at one stage. The purpose of the amendment is to regularize credit taken at the input stage (on wire-rod), credit taken by the downstream user of 'drawn wire' and the amount paid as central excise duty on clearance of drawn wire. In other words, wire drawing units, which had paid a sum equal to duty leviable on drawn wire, would be eligible to avail the credit of duty paid on inputs and utilize the same for payment of duty on drawn wire for the period of amendment. The sum paid by the wire drawing unit in such cases will be treated as duty and shall be allowed as credit to the buyer of drawn wire, in terms of the amendment. This amendment ....