2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT

Effect of amendment to Cenvat Credit Rules - retrospective or prospective - inputs used in capital goods embedded to earth - as the amendment brought in CENVAT Credit Rules 2004 as per Rule 2 of the CENVAT (Amendment) Rules 2009 retrospective in nature considering is it clarificatory to be applied to all matters which arise before 07.07.2009, the date of commencement of the CENVAT (Amendment) Rules 2009? - Held that: - Section 37 of the Central Excise Act, 1944 is a rule making power. Section 37(2)(xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods - Though the power to make rules include the power to give retrospective effect, while doing so the provision under consideration is neither made retrospective nor could it be treated as one.

The Gujarat High Court in Mundra Ports & Special Economic Zone Ltd. [2015 (5) TMI 663 - GUJARAT HIGH COURT] referred to the contents of the amendment and held that Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification on particular thing or goods and/or input and as such, the amendment could operate only prospectively.

Appeal allowed - decided in favor of appellant.