TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 1432
X X X X Extracts X X X X
X X X X Extracts X X X X
....edit which had been allowed by it in other similar cases including the decision of the CCESC dated 16th December, 2015 in the case of B.R. Ceramics (P) Ltd. ('BRCPL'). 3. The companion petition is by the Principal Commissioner of Central Excise, Delhi-1 (hereafter, 'the Department') questioning the aforementioned decision of the CCESC in the case of BRCPL contending that the Cenvat Credit as claimed and allowed to BRCPL by the CCESC, was not permissible. 4. The background facts in W.P. (C) 6706 of 2016 are that GCPL imported ceramic tiles between June, 2010 and January, 2014 and paid: (i) Basic customs duty; (ii) Additional Duty of Customs equal to the excise duty commonly known as countervailing duty ('CVD'); and (iii) Education Cess. 5. It is stated that CVD was paid on the basis of the maximum retail price ('MRP') declared on the unit containers of ceramic tiles as notified under Section 4-A of the Central Excise Act, 1944 ('CE Act'). It is pointed out that the ceramic tiles are included in the Third Schedule to the CE Act whereby any process such as packing, re-packing or altering the MRP is deemed to be 'manufacture' under Section 2 (f) (iii) of the CE Act. It is poi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....E, Chennai-I v Amalgamation Valeo Clutch Pvt. Ltd. 2006) (206) ELT 91 (Mad.) and Rathi Ispat Ltd. v CCE, Meerut 2010 (251) ELT 199 (All.). 11.1 The Court would first like to discuss the decision of the CCESC in the case of BRCPL which has been assailed by the Department in W.P.(C) No.9152/2016. There BRCPL had imported ceramic tiles falling under the Third Schedule to the CE Act and had alleged to have altered the MRP by reaffixing stickers, and this was deemed to be manufactured. This led to the issuance of SCN not only to BRCPL but certain other entities as well. BRCPL voluntarily deposited Rs. 13 lacs as Central Excise Duty during the course of investigation. 11.2 A SCN came to be issued proposing a demand of CE duty totalling Rs. 3,04,73,655/-. BRCPL and the other entities applied to the CCESC for settlement, accepting the duty liability of Rs. 67,38,815/- and interest liability of Rs. 30,48,639/- accepting that the change in MRP should be deemed to be manufactured. BRCPL claimed that it had already deposited CED of Rs. 67,40,000/- along with interest of Rs. 30,50,000/-. It accordingly requested for waiver of penalty and prosecution and allowing deduction of Cenvat Credit of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aim for taking the Cenvat Credit. Unlike in the case of BRCPL, a penalty of Rs. 60 lacs was imposed and the CE duty was settled without giving credit of the CVD and interest payment. 13. In CCE, Chennai-I v. Amalgamation Valeo Clutch Pvt. Ltd. (supra), the Madras High Court followed Osram Surya (P) Ltd. v. Commissioner of Central Excise, Indore (supra) to deny Cenvat Credit. A perusal of the said judgment shows that in paragraph 4, it was conceded by the counsel for the Assessee that "the manufacturer cannot take the Modvat Credit after six months from the date of documents specified in First Proviso to Rule 57-G of the CE Rules". Therefore, the decision proceeded on a concession. 14. As far as the decision in Rathi Ispat Ltd. v CCE, Meerut (supra) is concerned, here the reliance is essentially placed on the decision in Osram Surya (P) Ltd. v Commissioner of Central Excise, Indore (supra). None of these decisions are of help as far as the Department is concerned. 15. In the present case, we are concerned with the amendment to the Rule 4 of the CCRs with effect from 11th July, 2014, which reads thus: "Provided also that the manufacturer or the provider of output services shall ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only'." 20. Likewise in Samtel India Ltd. v. CCE, Jaipur 2003 155 ELT 14 (SC), it was held that the right to credit accrued to an Assessee on the date the tax on inputs was paid. Once the inputs were used, the Rule imposing a period of limitation, could not be given retrospective effect. 21. The Gujarat High Court in Filco Trade Centre Pvt. Ltd. v. Union of India (decision dated 5th September, 2018 in SCA No.18433/2017) followed the dictum of the Supreme Court in Jayam & Co. v. Assistant Commissioner (supra) and reiterated that the input tax credit could not be denied on the basis of an amendment, which is prospective. The question dealt with by the High Court was whether Section 140-A (3) (iv) of the CGST Act, which declined the Cenvat Credit in relation to goods purchased prior to one year from the appointed date, could be given retrospective effect. In answering the question in the negative, the Gujar....