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2016 (6) TMI 311 - HC - Central ExciseAdmissibility of MODVAT credit - Excise duty paid on High Speed Diesel Oil (hereafter 'HSD') which was consumed by the Petitioner for generation of electricity used for the manufacture of excisable goods in its factory - The disputes in the present case essentially concern the MODVAT credit which was claimed and allowed to the Assessee for the period 16th March, 1995 till 1st March, 1998. - Period before the retrospective amendment vide Section 112 of the Finance Act, 2000 Held that:- the Supreme Court noticed the Notification No. 5/94-C.E. (N.T.) dated 1st March, 1994 and Notification No.8/95-C.E. (N.T.) dated 16th March, 1995 issued under Rule 57A of the Rules and held that the appellants were not entitled to credit for the duty paid on HSD. The Supreme Court further noticed that although the appellants were not entitled to claim MODVAT credit on the duties paid on HSD, the Tribunals had held otherwise and "therefore, there was a necessity for the Finance Act to be brought in whereby a clarificatory explanation to the legal position was laid down". The Supreme Court also rejected the contention of the appellants therein that Section 112 of the Act had the effect of taking away vested rights. Appellant is correct when he contends that the constitutional validity of Section 112 of the Act was not challenged in Sangam Spinners Limited. However, as noted above, the contention whether any vested right was created in favour of the appellants was considered by the Supreme Court and the same was expressly rejected. The Supreme Court had further held that Section 112 of the Act was clarificatory and the appellants were not entitled to credit for duties paid on HSD by virtue of the express exclusion in notifications dated 1st March, 1994 and 16th March, 1995. Thus, the very basis on which the Petitioner advanced its contentions stands eroded. Therefore, the contention that the provisions of Section 112 of the Act are expropriatory must be rejected, as squarely covered by the decision of the Supreme Court in Sangam Spinners Limited v. Union of India and Ors. [2011 (3) TMI 4 - Supreme Court]. The Petitioner’s contention that a separate adjudication was required for raising a demand for recovery of MODVAT credit availed on HSD also cannot be accepted as the said issue was considered by the Supreme Court in Ors. v. Maharaja Shree Umaid Mills [2013 (12) TMI 878 - SUPREME COURT]. Therefore, it is clear that Section 112 of the Finance Act 2000 has been held to be clarificatory and it has been conclusively held that MODVAT credit on duties paid on HSD used as an input was not available. Consequently, assessees who had claimed the same were liable to refund the credit wrongly taken. - Decided against the petitioner
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