TaxTMI 
TaxTMI 
2008 (1) TMI 94
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....3-2006 by which Rule 5 of the Cenvat Credit Rules, 2004 was substituted. Since Rule 5 prior to its substitution by Notification No.4/2006 dated 14-3-2006 did not provide for refund of unutilized credit to the producer of output services, the claim was rejected by the Assistant Commissioner and his order was upheld by the Commissioner (Appeals) vide his impugned order. Commissioner (Appeals) did not agree with the plea of the appellant that the Rule 5 substituted by Notification No. 4/2006 dated 14-3-2006 was of a clarificatory nature and that they had substantative right to claim refund under those provisions, once all the conditions prescribed under Notification were fulfilled and therefore refund cannot be denied. The Commissioner (Appeals) in his order held that since the refund claim pertains to the period prior to 14-3-2006, Rule 5 under which the refund claims have been submitted during the relevant period empowered only a manufacturer of goods to claim refund and not the provider of output services. It was only with effect from 14-3-2006 vide Notification No. 5/06 that refund was made admissible to provider of output services also. He relied upon the decision of the Supreme ....
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....etter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported the Cenvat credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, (i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or (ii) Service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification: Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax. Provided further that no credit of the additional duty leviable under sub-s....
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....rawback. There is also no question of even a manufacturer of goods exported availing drawback of service tax paid on input services prior to 13-7-2006. 4. The proviso also bars claiming of rebate of duty under Central Excise Rules, 2002 in respect of such duty. The only provision for rebate in Central Excise Rules, 2002 is contained in Rule 18. That rule even today contemplates rebate of excise duty paid on finished products exported or rebate of excise duty paid on inputs used in the manufacture of products exported. There is no question of, therefore, a provider of output service claiming a rebate of duty under Central Excise Rules, 2002. 5. In view of the above, it was submitted that the five words appearing in the first proviso are clearly surplus and wrongly placed. These words should have appeared after the words "the manufacturer" appearing in the last leg of main Rule 5. To support this plea it was submitted that the last leg of Rule 5 refers to " Where for any reason such adjustment is not possible, the manufacturer shall be allowed refund of such amount..." "Such" adjustment contemplated in Rule 5 are utilization of credit on inputs or input services towards payment....
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....submitted that the five words "or provider of output services" should be taken out from the proviso to Rule 5 as it stood prior to 14-3-2006 and should be substituted after the words "the manufacturer" in the last leg of main Rule 5. 7. The second plea made was that in any view amendment made on 14-3-2006 is merely clarificatory and therefore, retrospective and applies for the past period also. Reference in this regard was invited to the Supreme Court decision in the case of Indian Tobacco Association - 2005 (187) E.L.T. 162 (S.C.) wherein para 27 it has been specifically stated that "Where a statute is passed for the purpose of supplying an obvious omission in a former statute, the subsequent statute relates back to the time when the prior Act was passed." Reference was also invited to the Supreme Court decision in the case of Zile Singh v. State of Haryana, 2004 (8) SCC 1 wherein it was held that "presumption against retrospective operation is not applicable to declaratory statutes .... In determining, therefore, nature of the Act, regard must be had to the substance rather than to the form. If a new Act is "to explain" an earlier Act, it would be without object unless constru....
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....as has been done only now. In view of this the alleged omission cannot be considered as an obvious mistake in printing/drafting, nor can the amended provisions be considered to be clarificatory in nature and cannot therefore have retrospective effect. 9. We are however in agreement with the last plea taken by the appellants that the refund claim filed by them on 26-4-2006 onwards will be governed by the rules as it stood on those dates. The substituted Rule 5, nowhere suggests or says, that it will apply for exports made after 14-3-2006. Hence any claim filed on or after 14-3-2006 which satisfies other requirements of the rules and notification issued thereunder, cannot be turned down on a ground which is not a condition or requirement of the rule or notification. A statute cannot be treated retrospective merely because it relates to the past action. A statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transaction already past alone is called a retrospective legislation. The position that a prospective benefit under a statutory provision is measured by or de....