TMI Blog2011 (6) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. Per. Rakesh Kumar :- The facts giving rise to this appeal are in brief as under :- 1.1 The respondents are a manufacturer of 'Lead in Wire' chargeable Central Excise duty under sub-head 8539.90 of the Central Excise Tariff. It is further used in the manufacture of lamps and tubes as a component. They availed Cenvat Credit of duty paid on inputs Nickel Copper Alloy wire (sub-heading 7505.22), copper wire alloy (sub-heading 7408.29), ferrous based resistance wire (sub-heading 7223.00), PB wire (sub-heading 7408.29) and copper wire (sub-heading 7408.19). The various types of wires had been purchased from wire drawing units who were making wires from the wire rods. The respondent had taken Cenvat Credit of duty paid on wire on the basis of Central Excise invoices issued by the manufacturers of wire from wire rods. During the period from August, 2003 to August, 2004, total Cenvat Credit of Rs.18,59,681/- was taken by the respondent in respect of wires received by them from wire manufacturers. Hon'ble Supreme Court in its judgement dated 27.03.03 in the case of Technoweld Industries reported in 2003(155)ELT209(SC) had held that drawing of wires from wire rods does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Hon'ble Supreme Court in the case of Technoweld (supra), the process of drawing wire from wire rod does not amount to manufacture, that the amount paid as Central Excise duty by the manufactures of wires cannot be treated as duty and hence its Cenvat credit is not available to the respondent, that the Commissioner(Appeals) has wrongly held that the process at the end of manufacturer suppliers amounts to manufacture and that the duty paid by the wire manufacturers on their own volition cannot be treated as duty and on Cenvat credit would not be available to the respondent. 3. Shri Gagan Kohli, Advocate, the Ld. Counsel for the respondent defending the impugned order pleaded that when the Central Excise duty has been accepted by the jurisdictional Central Excise authorities from the manufacturers of wires, the Cenvat credit cannot be denied to the respondent by the Central Excise authorities having jurisdictional over the respondent by questioning the payment of duty by the manufacturer suppliers of wire, that in this regard reliance is placed on the judgement of the Hon'ble Supreme Court in the case of CCE vs. MDS Sqares Ltd. reported in 2008(229)ELT485(SC) and in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 39 of the Taxation Laws (Amendment Act), 2006, a proviso has been added to sub rule 3 of Rule 16 for the period from 25.05.03 to 08.05.04 providing that for the purpose of this rule, the word 'assessee' shall include wire drawing units which had cleared the goods on payment of an amount equal to the duty at the applicable rate on the date of removal and on the value determined under the relevant provisions of the Act and the rules framed thereunder and that the amount paid as duty shall be allowed as Cenvat credit as if it was duty the paid by the assessee who removed the goods, that Board vide Circular No.831/8/06/CE, dated 26.07.06 has with regard to this retrospective amendment to Rule 16 of the Central Excise Rules, 2002 clarified that retrospective amendment to Rule 16 is aimed at facilitating wire drawing units which had paid a sum equal to the duty leviable on the drawn wire after availing Cenvat credit paid on inputs for the said period, that as per this Circular of the Board in respect of the wire drawing units, during the period of retrospective amendment, i.e., from 29.05.03 on 08.07.04, the sum paid by these units will be treated as payment of duty on drawn wire and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall state the particulars of such goods in his records and shall be entitled to take Cenvat credit of the duty paid on these goods as if such goods are received as inputs under Cenvat credit Rules, 2002. Under sub-rule (2) of Rule 16, if the process to which said goods are subjected before being removed, does not amount to manufacture, the manufacturers shall pay an amount equal to the Cenvat credit taken under sub-rule (1) and in other case, the manufacturer shall pay duty on the goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined u/s 3(2) or the section 4 or 4A of the Central Excise Act, 1944, as the case may be, under Sub-rule (3) of rule 16, if there is a difficulty in following this provision of sub-rule (1), the assessee may receive goods for being re-made, refined or any other reason and may remove said goods subsequently subject to such conditions as may be specified by the Commissioner. By retrospective amendment to sub-rule (3) by section 39 of the Taxable Laws (Amendment) Act, 2006, the following provisions were added to sub-rule (3) with retrospective effect 'provided that for the purpose of this rule 'an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f wire drawing did not amount to manufacture for the said period. Show Cause Notices were also issued to the downstream buyers of 'drawn wires' who availed Cenvat Credit of amount paid as duty on drawn wire, on the ground that the sum paid on clearance of 'drawn wire' by wire drawing unit did not represent central excise duty. Such wire drawing units could also not claim the refund of amount paid as duty on drawn wire, on the ground of unjust enrichment. I this regard, Board's letter dated 3rd January, 2005 issued vide F.No.139/3/2004-CS.4 may also be referred to. 4.4 The retrospective amendment in Rule 16 is aimed at facilitating 'wire drawing units', which had paid a sum equal to the duty leviable on 'drawn wire' after availing the credit of duty paid on inputs for the said period. It is aimed at regularising availment of credits at two stages and payment of an amount representing duty at one stage. The purpose of the amendment is to regularize credit taken at the input stage (on wire-rod), credit taken by the downstream user of 'drawn wire' and the amount paid as central excise duty on clearance of drawn wire. In other words, wire drawing units, which had paid a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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