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2015 (2) TMI 836 - HC - Central ExciseClearance to Free Trade Zone - Denial of MODVAT credit-Rule 57C - Clarificatory amendment have restropective effect - Held that:- The settled principle is that if any amendment is clarificatory in nature the same is retrospective in operation. What is material to note is the application thereof to the given facts and circumstances. That general principle is no doubt laid down in several decisions but whether a particular amendment is clarificatory or substantive will depend on the amendment, the statute in which it is brought in and the object and purpose sought to be achieved. A bare reading of the amended provisions would denote as to how after the words or rather for the words "in the manufacture of a final product", the words "in the manufacture of a final product (other than those cleared either to a unit in a Free Trade Zone or to a hundred percent ExportOriented Unit)" were substituted. Once their substitution is read and in the light of the unamended rule, it would clearly emerge as to how credit of duty was not to be allowed if the final products are exempt. The intent was not to allow any such credit on the inputs used in the manufacture of a exempted final product. If the final product is exempted from whole of duty leviable thereon or is chargeable to nil rate of duty. However, upon manufacture if such final product is cleared either to a unit in a free trade zone or to hundred percent export oriented unit then the prohibition in rule 57C does not apply. This is really a substantive amendment. A free trade zone or units therein or exportoriented unit undertake activities which would facilitate the country in earning foreign exchange and which is considered extremely valuable. In that regard and to encourage such units to undertake the activities noted above, frequently, that this rule was amended. That was also enabling the suppliers of such duty free products and received in the free trade zone to claim credit on the basis of the clearances made. If such is the intent and purpose and the departure is specifically made from a particular date, then, such amendment cannot but be held to be prospective. In the light of the above discussion, we find that the Tribunal was justified in dismissing the appeal of the assessee. The Tribunal rightly held that the credit was inadmissible and could not have been availed of in the light of the legal provision prevailing at the time at which the credit was availed by the appellant assessee. In such circumstances and the view taken, not being perverse or vitiated by any error of law apparent on the face of the record, this appeal fails. - Decided against the assessee.
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