TMI Blog2016 (9) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... f India Ltd, Machsons Pvt Ltd., Vs CCE & C, Belapur [2014 (2) TMI 297 - CESTAT MUMBAI]. By following the same, I am able to conclude that appellant cannot be considered as a manufacturing unit of input service distributor, M/s PPPL, for the purpose of availing CENVAT Credit on input invoices issued by M/s PPPL. The second contention raised by the appellant is that the amendment brought forth to Rule 7 with effect from 01.04.2016 being a ‘substitution’ has to be applied retrospectively. At the outset, it has to be stated that there is nothing in the amendment which says that the amendment is to apply retrospectively. The amendment does not appear to be clarificatory or for correcting any obvious mistake or for removing any discrimination between same class. Therefore, the judgments cited by the learned counsel for appellant in my view does not assist the appellant. As already stated since the amendment brought forth with effect from 01.04.2016 does not state that it is to apply retrospectively, I am able to conclude without any hesitation that the amendment is to apply prospectively only. From the foregoing I hold that the appellants are not eligible to avail CENVAT Credit on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability. They also availed CENVAT credit on the invoices issued by M/s PPPL as Input Service Distributor (ISD). The department entertained the view that appellant being only a job worker to the principal manufacture viz: M/s PPPL, and being a totally independent entity from M/s PPPL, the appellant cannot avail CENVAT credit on the input invoices issued by M/s PPPL. Show cause notices were issued to the appellant proposing recovery of duty along with interest and for imposition of penalties. The details of the different show cause notices, the period involved and the duty demanded are stated in the following table below: Appeal No. E/27077/13 E/27078/13 E/30012/15 Demand (duty) Rs.4,65,532/- Rs,14,49,469/- Rs.7,32,809/- Penalty Rs.4,65,532/- Rs.14,49,469/- Rs.7,32,809/- Period July, 2001 to May, 2012 Aug, 2005 to June, 2011 July, 2013 to Nov, 2013 SCN date 13.09.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw materials/packing materials supplied by PARLEY the appellants being manufacture units of PARLEY are eligible to take credit on the invoices issued by M/s PPPL and input service distributor. (ii) That in any case, Rule 7 of CENVAT Credit Rules, 2004 has been substituted with effect from 01.04.2016, wherein a specific provision has been made for an ISD to distribute the credit of input services to job workers/contract manufacturers who manufacture goods including outsourced manufacturing unit. That this amendment is made by substitution of existing Rule 7 of CENVAT Credit Rules, 2004. That this amendment is made only to correct the mistake/lacuna in the earlier rule and hence the same would have retrospective effect from the inception of CCR, 2004 (i.e. 10.09.2004). Substitution of any rule or any notification or any parts thereof would have retrospective effect from the date of incorporation of such rule or notification in the statute. To support this contention the learned counsel relied upon the following judgments; a) Indian tobacco Association [2005 (187) ELT 162 (SC)] b) Zile Singh v/s State of Haryana Others c) Steel Authority of India Ltd., [201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the provisions of CENVAT Credit Rules. In support of his contention, the learned AR Sh. Arun Kumar relied upon the judgments of the Tribunal in Sunbell Alloys com of India Ltd., Machsons Pvt Ltd., Vs CCE c. Belapur [2014-TIOL-38-CESTAT-MUM]. Further that, the amendment brought forth in Rule 7 of CCR, 2004 with effect from 01.04.2016 is only prospective in nature and it cannot be applied retrospectively. Had the legislature intented the amendment to apply retrospectively, the same would have been specifically stated in the amendment itself. That therefore the appellants cannot be considered as manufacturing units of M/s PPPL. It was also argued that the appellant had supressed the facts regarding the availment of CENVAT Credit on invoices issued by M.s PPPL and therefore the extended period of 5 years has been rightly invoked and the equal amount of penalty imposed in right and proper. 6. I have heard both sides and perused the records carefully. 7. The issue involved is whether the appellant is eligible to avail the CENVAT Credit of input service distributed by the M/s PPPL as an input service distributor. For better appreciation, Rule 7 of CCR, 2004 during relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce distributor means an office of the manufacturer or producer of output service. In this case, the distributor is M/s. Merck Specialties Ltd. whereas the manufacturers are the appellants. Since these are separate legal entities, office of M/s. Merck cannot be considered as an office of the manufacturer and hence Merck cannot be considered as an input service distributor as defined under Rule 2(m) of the CCR, 2004. Further, as per Rule 7, the input service distributor has to distribute the credit to its manufacturing units . The manufacturing units of the appellants are not that of M/s. Merck Specialties Ltd. and these units belong to the appellants and therefore, M/s. Merck cannot distribute Cenvat credit to the appellants under Rule 7 of CCR, 2004 as aforesaid. The expression its manufacturing unit specified under Rule 7 has to be interpreted in terms of the ratio of the decision of the Tribunal in the case of Panasea Biotec Ltd. (cited supra). In that case, for availing the benefit of Notification 23/98-Cus., a condition was prescribed that the importer should utilise the imported bulk drugs in the manufacture of life saving drugs in his factory. A question arose whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job-workers, and the appellant s manufacturing units do not belong to M/s. Merck Specialties Ltd. Further, office of M/s. Merck Specialties cannot be considered as an office of the appellant. Therefore, the distribution of credit by M/s. Merck Specialties Ltd. to the appellants are contrary to the provisions of law and accordingly, they are not eligible for the input service credit distributed by Merck Specialties Ltd. and we hold accordingly. 9. Following the ratio laid in the above judgment I am able to conclude that appellant cannot be considered as a manufacturing unit of input service distributor, M/s PPPL, for the purpose of availing CENVAT Credit on input invoices issued by M/s PPPL. 10. The second contention raised by the appellant is that the amendment brought forth to Rule 7 with effect from 01.04.2016 being a substitution has to be applied retrospectively. At the outset, it has to be stated that there is nothing in the amendment which says that the amendment is to apply retrospectively. The learned counsel has relied on various judgements as stated above to put forth the argument that when an amendment to argue that when amendment is introduced by substitution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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