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2005 (9) TMI 136 - AT - Central ExciseCenvat/Modvat - Input used in the manufacture of such final product or not - correlation with final products - duty paid on the tin plates used in the manufacture of battery parts but utilised the credit for payment of duty in respect of other final products, in the manufacture of which such tin plates were never utilized - Whether Notification No. 11/95-C.E. (N.T.), dated 16-3-95 introducing proviso to Rule 57F(4) should be treated as a retrospective - HELD THAT:- As it is clear from contrast reading of Rule 57F(4) without the proviso and with the proviso that the earned credit could be utilised only in the manner specified in the said rule sub-rule (i) allows such utilisation towards payment of duty of excise on any of the final products in or in relation to the manufacture (emphasis provided) of which such inputs are intended to be used. Reasonable interpretation and conclusion from the above reading, which follows, is that if such inputs are not intended to be used in or in relation to manufacture of a final product, earned credit would not be available for use. However, with the addition of proviso, the entire scenario changed. The proviso starts with 'notwithstanding anything contained in sub-rule (1) of Rule 57A. As such, it goes without saying that the proviso extends the scope of the rule and by way of an exception to the otherwise general rule laid down for utilisation of credit. Such additional facility extended has to be held as being effective from the date, when it was extended and cannot, in my views, be held to be retrospective. Any subsequent enactment can be held retrospective in nature, when the benefit it seeks to extend was otherwise also available on the interpretation of the existing provisions and it merely clarifies the same. That is not the case here. As such, I am of the opinion that the credit earned in respect of tin plates is not available for payment of duty on paper drums prior to 16-3-95. Accordingly, the appellants are required to pay duty on paper drums out of PLA. However, the credit so reversed by them at the time of discharge of duty is liable to be credited by them in the Modvat account. I am also of the view that penalty imposed upon the appellant is not justified as the issue involved is bona fide dispute about the interpretation of law. I refer the matter to Larger Bench. Registry is directed to place the papers before the Hon'ble President for constitution of Larger Bench.
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