TMI Blog2024 (2) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(5) of CENVAT Credit Rules, 2004 would not impact credit relating to inputs or input services , already consumed and not determined as attributable exclusively to production of exempted goods or exempted services as on date of erasure. The amendment was effected only for withdrawal of the privilege of exclusion from the general provisions of the rule 6 of CENVAT Credit Rules, 2004 that permitted retention of credit even after the factum of utilization in or deployment in exempted goods and exempted services become apparent. Consequently, the operation of rule 6(5) of CENVAT Credit Rules, 2004 did not, or does not, impact taking of credit but is only pertinent to the retention of credit and, being exclusion by special provision, would have to operate only with effect from the date on which such exclusion came into effect. It is in this context that the decision of the Hon ble Supreme Court in EICHER MOTORS LTD. VERSUS UNION OF INDIA [ 1999 (1) TMI 34 - SUPREME COURT] in SAMTEL INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [ 2003 (3) TMI 121 - SUPREME COURT] and in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [ 1999 (8) TMI 920 - SUPREME COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued to the appellant herein for recovery of ₹ 130,47,45,462/- that continued to be retained in their books for the period from 2011-12 to 2014-15 By order [order-in-original no. 53/CEX/COMMR/MKR/2022-23 dated 28th December 2022] of Commissioner of Central Goods and Service Tax, Aurangabad, recovery of this sum under rule 14 of CENVAT Credit Rules, 2004, along with interest thereon as applicable, was upheld while imposing penalty of like amount under section 11AC and Central Excuse Act, 1944. 3. Learned Counsel for the appellant submitted that the adjudicating authority had erroneously concluded that the Rules, as prevailing on the date of notice, would be the test for adjudging deviation from rule 6 of CENVAT Credit Rules, 2004 despite enactment for exclusion of rule 6(5) of CENVAT Credit Rules, 2004 not specifically providing for retrospective effect. It was contended that the decision of the Hon ble Supreme Court in Eicher Motors Ltd v. Union of India [1994 (106) ELT 3 (SC)] relating to vested inhering on accumulated credit and that decisions of Hon ble Supreme Court in Samtel India Ltd v. Commissioner of Central Excise, Jaipur [2003 (155) ELT 14 (SC)] and Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse of the adjudicating authority that 4.13.1 I, however, find that the issue involved in the matter is not of indefeasibility and vested rights with respect to Cenvat Credit lying in balance with the noticee as on 31.04.2011. No question has been raised in the show cause notice against such indefeasibility and vested rights . The question involved in this matter is misuse or unlawful use or unlawful utilization of said Cenvat Credit lying in balance and hence, is related to contravention of Rule 6 of the Cenvat Credit Rules, 2004 and consequences thereof. The aspect of indefeasibility and 'vested rights with respect to any amount of Cenvat Credit is one thing and misuse/mis-utilization of such credit in contravention of Rules established by the Government/authority is another thing which has no relation with the earlier one. Both are considered substantially different in jurisprudence. The concepts of indefeasibility and vested rights nowhere allow contravention of Rules/laws or arbitrarily interpretation of such Rules/law in favour of right holder. The noticee were at their will/option to defend those vested rights by some other legal means such as gettin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of these provisions taken together, it would appear that the assertion in rule 6(1) of CENVAT Credit Rules, 2004 relates to credit availed in terms of rule 3 of CENVAT Credit Rules, 2004 which, when taken, was beyond dispute but, owing to subsequent deployment either wholly or partly in production of exempted goods or rendering of exempted services, not permitted for retention as credit. It is that restriction, limited as it is to credit attributable to exempted goods and exempted services, to which rule 6(1) refers. The operation of law by erasure of rule 6(5) of CENVAT Credit Rules, 2004 could not impact the credit taken under rule 3 of CENVAT Credit Rules, 2004, at the time of procurement of the impugned services; nor is that entitlement thereof under challenge in the proceedings initiated by the notice issued to the appellant. Proceeding onward, the operation of erasure of rule 6(5) of CENVAT Credit Rules, 2004 would not impact credit relating to inputs or input services , already consumed and not determined as attributable exclusively to production of exempted goods or exempted services as on date of erasure. The amendment was effected only for withdrawal of the privilege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court on this issue considering the Notification in question. Hence, both the appeals require to be admitted. He has further submitted that deemed credit availed of by the respondent was not admissible in view of the facility having been withdrawn with effect from 1-4-2003, more particularly when Notification granting deemed credit was not in force on the date on which the respondent had availed of Deemed Credit alleged to be lying unutilised in the balance on the duty of discharge/payment of Central Excise Duty. He has further submitted that on scrutiny of ER-1 returns for the month of April, 2003 it was clearly noticed that the respondent had commenced to avail the benefit of Cenvat credit on actual basis of manufacture of finished product as per the amended Cenvat Credit Rules, 2002 effective from 1-4-2003 and, therefore, utilization of the Deemed Credit was wrongful. He has further submitted that the first proviso to Clause 3 of the said Notification provided that the credit of duty in respect of inputs used in goods exported under bond shall be allowed to be utilized towards payment of duty of excise on any final products cleared for home consumption or for export under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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