TaxTMI 
TaxTMI 
2016 (9) TMI 369
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....oduction debarring clause was existing in table to Rule-57Q(1) of the Central Excise Rules, 1944, therefore, no capital goods credit was admissible to the appellant who was availing compounded levy scheme under Section 3A of the Central Excise Act, 1944. That further Rule-57Q(7) also prohibits taking of cenvat credit on capital goods received on or after 01.01.1996. That period of dispute when capital goods were received is from December,1996 to August, 1997. That as per Rule-57S(11) of Central Excise Rules, 1944 credit lying unutilized on 01.08.1997 shall lapse and shall not be allowed to be utilized. That capital goods credit cannot be taken during compounded levy period 01.09.1997 to 31.03.2004 as per para-5 of CBEC Circular No.522/18/2000 dated 31.03.2000. 3. Shri R.S.Bajaj (CA) appearing on behalf of the respondent argued that as per para-9 of CBEC Circular No.345/2/2000-TRU dt. 29.08.2000 credit of capital goods credit was admissible. That First Appellate Authority has correctly relied upon Apex Court s decision in the case of Eicher Motors Ltd.& Anr. v. Union of India &Ors. [1999 -(XC2)-GJX-0387-SC]. Learned CA also relied upon case law Nahar Industrial Enterprises Ltd.-v....
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....s falling under Chapter24;and (ii) all goods falling under heading Nos.36.05 or 37.06. (iii) ingots and billets of non-alloy steel falling under sub-heading Nos.7206.90 and 7207.90, manufactured in an induction furnace unit , whether or not any other goods are produced in such induction furnace, and hot re-rolled products of non-alloy steel falling under sub-heading No.s 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90 on which duty is paid under section 3A of the Central Excise Act, 1944 (1 of 1944).]" 6.1. Rule 57Q(7) of the Central Excise Rules 1944 read as follows: " (7) The credit of the specified duty on capital goods [other than those capital goods covered under S.Nos.5,7,10,11 and 12 of column (2) of the Table below sub-rule(1)] and received in the factory on or after the 1st day of January, 1996, shall not be taken on a date prior to the date on which such capital goods are installed or, as the case may be, used for manufacture of excisable goods, in the factory of the manufacturer as certified by such manufacturer or a person designated....
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....able to Rule 57Q(1) and Rule 57 S(11) were made simultaneously under Notification No. 33/97-C.E.(N.T.) dated 01.08.1997. From the above provisions of MODVAT scheme under Central Excise Rules, 1994 it transpires that intention of the legislature behind above amendments was not to allow credit on capital goods if received by an assessee, who is paying duty on Iron and Steel finished goods under compounded levy scheme as per Section 3A of the Central Excise Act, 1944. Further as per Rule 57 S (11), if any, credit is lying unutilised the same shall lapse. 8. First Appellate Authority has relied upon Apex Courts decision in the case of Eicher Motors Ltd. vs. Union of India (Supra) which was delivered when Section 37(1) (xxviii) was not existing. It was introduced in the Central Excise Act, 1944 as per Sections 131 and 132 of the Finance Act, 1999 with retrospective effect. Learned AR has correctly relied upon the case law of Coral Cosmetics Ltd. vs. Union of India (Supra) where Bombay High Court has noted Apex Court s decision in the case of Eicher Motor Ltd. vs. Union of India (Supra) and made following observations /distinction :- "30. Before we proceed to consider the con....
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....essary implication. It is no doubt true that a declaratory or a procedural enactment which is, normally, held to be retrospective. A remedial Act, on the contrary, is not necessarily retrospective, it may be either enlarging or restraining and it takes effect prospectively, unless it has retrospective effect by express terms or necessary intendment, [see AIR 1960 S.C. 12 (Para 29) - The Central Bank of India and others v. Their Workman and also AIR 1973 S.C. 1227 - The Workmen of M/s. Firestone Tyre and Rubber Co. of India Pvt. Ltd. v. The Management and others.] Sometimes it becomes necessary to examine whether the enactment has a prospective or retrospective effect so as to affect the existing or vested right which has accrued to the subject prior to the enactment. Examined from this angle, it is clear from the text of Sections 131 and 132 of the Finance Act, 1999 that it has been specifically given a retrospective effect w.e.f. 1-10-1997 so as to effect existing or vested right which had accrued to the petitioner prior to the said enactment. The defect in the legislation, which was noticed by the Apex Court, stood removed by virtue of the said amendment." 8.1. Further Bombay ....