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2018 (10) TMI 1474 - HC - Central ExciseCENVAT Credit - common inputs used in manufacture of dutiable and exempt goods - goods cleared to SEZ developers - amendment in rule 6 - effect of amendment - retrospective or prospective - Provisions of the rule substituted. Whether an amount equal to 10% of the value of the final product cleared by the respondent/assessee, without payment of duty, to developers of SEZ, has to be paid by the assessee in terms of Rule 6(3)(b)/Rule 6(3)(i), since the assessee did not maintain separate accounts and that Rule 6(6) of the Rules does not give any exception to the clearances made to developers of SEZ from operation of Rule 6(3)(b)/6(3)(i) of the said Rules? Held that:- Identical view was taken by the High Court of Karnataka in the case of Commissioner of Central Excise and Sales Tax, Bangalore vs. Fosroc Chemicals (India) Pvt.Ltd., [2014 (9) TMI 633 - KARNATAKA HIGH COURT]. The question which was framed for consideration was whether the amendment to the Cenvat Credit Rules 2004, by substituting clause (i) of sub-rule (6) of Rule 6 of Cenvat Credit Rules, 2004, by way of notification No.50/2008-C.E.(N.T.), dated 31.12.2008 is prospective in operation or retrospective? - The Substantial Question of Law was answered in favour of the assessee holding that the said amendment is retrospective. On a reading of the amendment, it is evident that clause (i) of sub-rule 6 of Rule 6 was substituted, thereby, the provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty or either cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorised operations. Thus, the question would be as to what would be the meaning of the word 'substitute' - the 'substitution' by way of an amendment dated 31.12.2008 has to be read to put in place instead of the Rule, which was in existence prior to the said Notification. In other words, it has to be read as a replacement of an existing Rules. The Substantial Questions of Law framed for consideration are answered in favour of the respondent/assessee - appeal dismissed - decided against Revenue.
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