TMI Blog2016 (9) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... r Motor Ltd. vs. Union of India [1999 (1) TMI 34 - SUPREME COURT OF INDIA], the Cenvat Credit of ₹ 24,13,708.68/- has been wrongly allowed by the First Appellate Authority. - Decided in favour of Revenue - Appeal No. E/143/2007, CO-32/2007 - Order No. FO/A/75996/2016 - Dated:- 8-9-2016 - Shri H.K.Thakur, Member (Technical) Sri A.Roy, Suptd.(AR) for the Appellant Sri R.S.Bajaj, CA for the Respondent ORDER Per Shri H. K. Thakur 1. This appeal has been filed by the Revenue against Order-in-Appeal No. 28/HAL/06 dated 30.10.2006 passed by the Commissioner (Appeal-I), Central Excise, Kolkata as First Appellate Authority. 2. Sri A.Roy, Suptd.(AR) appearing on behalf of the Revenue argued that appellant has taken Modvat credit of capital goods which started commercial production only on 16.09.1997. That Sr.No.(1) of Table contained in Rule 57Q(1) of the Central Excise Rules, 1944; in the column Description of final Products , was amended by Notification No.33/97-C.E.(N.T.), dated 01.08.1997 to exclude capital goods credit if the same are used in the manufacture of Non-Alloy Steel Ingots and billets. That since on the date of commencing commercial productio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit of ₹ 23,23,786.68. Appellant also received capital goods after 31.07.11997 involving Modvat credit of ₹ 89,921/-. Total disputed credit is ₹ 24,13,708.68 with respect to capital goods received prior to installation and commissioning done on 16.09.1997. 6. It is the case of the Revenue that on the date of installation compounded levy scheme was applicable to appellant, therefore, capital goods credit is not admissible and even if it was admissible prior to 16.09.1997 the same is deemed to have lapsed by virtue of Rule 57S(11) of the Central Excise Rules, 1944. Sr.No.1 of the table to Rule 57Q(1) of the Central Excise Rules, 1944, as amended by Notification No. 33/97-C.E.(N.T.) dated 01.08.1997 read as follows: TABLE S.No. Description of capital goods falling within the Schedule to the Central Excise Tariff Act, 1985(5 of 1986) and used in the factory of the manufacturer Description of final products (1) (2) (3) 1. All goods falling under heading Nos.82.02 to 82.11; All goods specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export; (b) on the first day of August, 1997, with the manufacturer of hot re-rolled products of non-alloy steel falling under sub-heading Nos. 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), and who is required to pay duty under section 3A of the Central Excise Act, 1944 (1 of 1944), shall lapse and shall not be allowed to be utilised for payment of duty on any excisable goods, whether cleared for home consumption or for export.] 7. Amendments/insertions to Sr.No.1 of Table to Rule 57Q(1) and Rule 57 S(11) were made simultaneously under Notification No. 33/97-C.E.(N.T.) dated 01.08.1997. From the above provisions of MODVAT scheme under Central Excise Rules, 1994 it transpires that intention of the legislature behind above amendments was not to allow credit on capital goods if received by an assessee, who is paying duty on Iron and Steel finished goods under compounded levy scheme as per Section 3A of the Central Excise Act, 1944. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based, has been fundamentally altered by the said provision. The Parliament, inter alia; validated clause (e) of sub-Rule (17) of Rule 57 of the said Rules with retrospective effect. 33. It is no doubt true that in Eicher Motors Ltd. (supra) the Apex Court ruled that the Modvat credit standing to the credit of the assessee on 31st September, 1997 was a vested right; which was accrued in favour of the petitioner or, at any rate, it was an existing right. It is a settled principle of interpretation of statues that a vested right or even an existing right, including a right of action is not affected or allowed to be taken away unless it is so affected or taken away by the enactment expressly or by necessary implication. It is no doubt true that a declaratory or a procedural enactment which is, normally, held to be retrospective. A remedial Act, on the contrary, is not necessarily retrospective, it may be either enlarging or restraining and it takes effect prospectively, unless it has retrospective effect by express terms or necessary intendment, [see AIR 1960 S.C. 12 (Para 29) - The Central Bank of India and others v. Their Workman and also AIR 1973 S.C. 1227 - The Workmen of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. In the above view of the matter, petitioner stands denuded of its vested right by virtue of the retrospective amendment. The contention raised on behalf of the petitioner that it does not take away vested right is devoid of any substance. 9. As has been observed in paragraph-7 above the intention of the legislature was not to allow Modvat credit with respect to capital goods during the period of compounded levy or if any credit is lying unutilised before the compounded levy period the same shall lapse. The ratio laid by Bombay High Court in para- 34,35 and 36 of case law Coral Cosmetics Ltd. vs. Union of India (Supra), after relying upon Apex Court s decisions, squarely applies to the existing facts. 10. Reliance placed by the respondent on the case law Nahar Industrial Enterprises Ltd. vs. CCE, Chandigarh (Supra) will not be of any help to the respondent as lapsing clause was not existing in Notification No.19/2000 dt. 01.03.2000 and has not been discussed so by CESTAT, Delhi. Secondly, the benefit of ratio laid by the Bombay High Court in the case of Coral Cosmetics Ltd. vs. Union of India (Supra) was not available to CESTAT, Delhi while deciding the case of Nahar Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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