TMI Blog2018 (10) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - C.M.A. No.2700 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure laid down under Rule 6(2)(a) of the Rules or pay 10% of the value of the exempted goods cleared as per Rule 6(3)(i) of the said Rules. 6.According to the Revenue, the exception from restrictions imposed on the use of the goods, for the manufacture of the exempted products, as provided under Rule 6(6) of the Rules, is available only to to the clearances made to SEZ Unit' and not to 'SEZ Developer', as the developers of SEZ were brought into the ambit of the Rules only from 31.12.2008, vide Notification No.50/2008 (NT), dated 31.12.2008. On such interpretation, show cause notice dated 22.01.2009 was issued to the respondent/assessee, demanding an amount equivalent to 10% of the transaction value on the goods cleared to SEZ developers/Co-developers, for the period January 2008 to December, 2008 and an amount of ₹ 34,19,210/- was demanded for the period January 2008 to March 2008 and a sum of ₹ 37,75,461/- for the period April 2008 to December 2008. 7.The assessee submitted their reply dated 18.5.2004. The Commissioner, who adjudicated the show cause notice, vide order in original dated 22.09.2009, rejected the stand taken by the respondent/asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developer on the same footing. The obligations arising under the Excise Act or the 2002-Rules or the 2004-Rules for a unit in SEZ should be same for a developer of SEZ; they should have same liabilities, same benefits. However, this was not so; there was some distinction in the 2004-Rules as they were initially framed. 43.Initially, sub-rule 6(6)(i) provided that the provisions of sub-rules 6(1) to 6(4) of the 2004-Rules will not be applicable in case the excisable products are removed without payment of duty and cleared to a unit in a SEZ. 44.The relevant point to note is that the 2004-Rules as initially envisaged provided benefit to the goods cleared to a unit in SEZ only and not to the developer though under the SEZ Act the position of the developer as well as the unit was one and the same; they were in the same class, entitled to the same treatment. This appears to be an inadvertent omission. 45.It appears that the aforesaid mistake was realised by the Government and Rule 6(6)(i) of the 2004-Rule was substituted by the following new sub-rule(see Appendix-2). 50.It is clear from the nature of the excise duty as it has been traditionally understood to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of goods to a Unit or Developer , in clause (i) of sub-rule (6) of Rule 6 of the Cenvat Credit Rules, 2004, the word Developer was conspicuously missing and only unit was included before the 2008 amendment. It is in that context the aforesaid amendment by Notification No.50/2008 C.E.(N.T.), dated 31.12.2008 was brought in, to clarify the doubt. As the said amendment is clarificatory in nature, that is the reason why it was brought by way of substitution . The effect of the said substitution is that the Cenvat Rules 2004 are to be read and construed as if the altered words had been written into the Rules of 2004 with pen and ink and the words to a developer of the SEZ for their authorized operation was there from the inception. This is the understanding of the Government as is also clear from the circular issued by the C.B.E C bearing No.29/2006-Cus., dated 27.12.2006 wherein clause 4 reads as under:- 4.In the light of the aforesaid provisions, with effect from 14.3.2006, chapter XA of the Customs Act, 1961, the SEZ Rules, 2003, the SEZ (Customs Procedure) Regulations, 2003 and the exemption Notification NO.58/2003-C.E., dated 22.7.2003 regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal is not entertained and disposed of . 15.The aforementioned decision of the High Court of Karnataka in Central Excise Appeal No.54 of 2015 was followed in Principal C.C.E.Bangalore-I vs. Power Control Equipments (Unit-II) [2016 (336) E.L.T.284(Kar.)] and the appeal filed by the Revenue was disposed of on the same lines as per the observations contained in the judgement in Central Excise Appeal No.54 of 2015. In the case of Commissioner of Central Excise vs. DEE Development Engineers Pvt.Ltd., [2016(339) E.L.T.560( P H) , the identical question was decided in favour of the assessee. The operative portion of the judgement reads as follows: 2.At the very outset, it was not disputed by learned counsel for the parties that identical issue was gone into by three different High Courts in 'Commissioner of Central Excise Customs, Raipur v. M/s.Steel Authority of India Ltd., Bhilai Steel Plant, Bhilai, 2013-TIOL-384-HC-Chhattisgarh-CX=2013(297) E.L.T.166 by Chhattisgarh High Court, which was followed by Andhra Pradesh High Court in CEA No.40 of 2012, the Commissioner of Customs Central Excise, Hyderabad v. M/s.Sujana Metal Products Ltd., decided on 2.7.2013 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or to exchange . In Collins English Dictionary, the word substitute has been defined to mean to serve or cause to serve in place of another person or thing , to replace (an atom or group in a molecule) with (another atom or group) ; or a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague. 19.Thus, 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. 20.The Hon'ble Supreme Court in the case of Zile Singh vs. State of Haryana and Others [(2004) 8 SCC pg.1 brought about the distinguishing features between 'substitution' and 'supersession' and explained the same as under:- 24.The substitution of one text for the other pre-existing text is one of the known and well-recognised practices employed in legislative drafting. Substitution has to be distinguished from supersession or a mere repeal of an existing provision. 25.Substitution of a provision results in repeal of the ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been notified under Section 4 hof the Act. Supplies from DTA to SEZ shall be exempt from payment of any Central Excise duty under Rule 19 of Central Excise Rules, 2002. Similarly, such supplies shall be eligible for claim of rebate under Rule 18 of Central Excise Rules, 2002, subject to the fulfilment of conditions laid thereunder. The provisions relating to exports under Central Excise Act, 1944 and rules made thereunder may be applied, mutatis mutandis, in case procurement by SEZ units and SEZ developer from DTA for their authorized operations. 22.In the light of the above, we are in respectful agreement with the decision in the case of Steel Authority of India Ltd., and in the case of FOSROC Chemicals India (P) Ltd . The learned counsel for the Revenue pointed out that the decision in the case of Steel Authority of India has been challenged before the Hon'ble Supreme Court and the same is pending as well as the decision of the Tribunal in the case of Sujana Metal Products Limited , which was confirmed by the High Court of Andhra Pradesh in the case of Commissioner vs. Sujana Metal Products Ltd [2016 (342) E.L.T.A115 (A.P.] , Therefore, we are incline ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
