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2014 (1) TMI 472 - AT - Central ExciseDuty demand - Concessional rate of duty under SSI exemption Notification No. 9/2002-CE dated 1.3.2002 and 9/2003 dated 1.3.2003 - Availment of CENVAT Credit - Held that:- benefit of availment of credit of duty on inputs by the ‘wire drawing units’ was withdrawn on 29.5.2003 by a circular issued by the Board. However, certain wire drawing units continued to pay a sum representing duty, and continued to pass on the credit of amount paid as duty to the ultimate buyer of drawn wire for further manufacture. By an amendment in the Budget 2004, Note 10 was inserted in Section XV of the Central Excise Tariff Act, 1985 to declare the said process as amounting to ‘manufacture’. However, as the said Section Note was effective from 9.7.2004, it did not resolve the problem for the said period. Show Cause Notices were issued to wire drawing units for recovery of Cenvat Credit availed on inputs on the grounds that the process of wire drawing did not amount to manufacture for the said period. Show Cause Notices were also issued to the downstream buyers of ‘drawn wires’ who availed Cenvat Credit of amount paid as duty on drawn wire, on the ground that the sum paid on clearance of ‘drawn wire’ by wire drawing unit did not represent central excise duty. Such wire drawing units could also not claim the refund of amount paid as duty on drawn wire, on the ground of unjust enrichment. 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 regularizing 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 would not create any additional liability on any wire drawing unit which did not pay duty on drawn wire during the period of amendment - Decided against Revenue.
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