TMI Blog2024 (3) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... nue is accepted, then the Cenvat credit of part of Input and Input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004. The Government has substituted the sub-rule (3A). The legislators very consciously substituted the Rule with intention to give a clarificatory nature to the provision of sub-rule (3A) so as to make it applicable retrospectively. It was all along not the intention of the Government to deny Cenvat credit on the input/input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub-rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-rule (3A) shall have retrospective effect being clarificatory. In the case of GOVERNMENT OF INDIA VERSUS INDIAN TOBACCO ASSOCIATION [ 2005 (8) TMI 113 - SUPREME COURT] , the Hon ble Supreme Court held that the word substitute ordinarily would mean to put (one) in place of another ; or to replace - As per the interpretation of the Hon ble Supreme Court, the sub-rule (3A) being substitution shall have a retrospective effect and will be applicable for all time since when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, or in relation to, the manufacture of exempted goods in terms of conditions and procedure and formula specified in sub-rule 6(3A) of the CCR. Appellant intimated action taken under Rule 6(3A) of the CCR from time to time to the jurisdiction central excise range. The department observed that the final amount determined by the Appellant were not in accordance with the provisions of the Rule 6(3A)(c) of CCR. As per revenue appellant were required to have taken into consideration total cenvat credit availed during the financial year whereas appellant has considered common credit on inputs and input services used for manufacture of dutiable and exempted products. Further appellant had adopted assessable value of the exempted goods as against the transaction value of exempted goods, which resulted into short computation and reversal of amount of credit attributable to the exempted goods in terms of Rule 6(3A). Therefore, the department was of the view that the appellants have not reversed the actual proportionate credit for which show cause notices were issued to the appellant for the period 2008-09 to 2013-14 proposing to demanding differential amount. The show cause notices also pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Commissioner has erred in holding that the said LPG was a product intentionally produced by the appellant and the same was not accidentally generated in the process of manufacture. The ratio laid down in the said judgment in the context of LPG squarely applies in respect of SKO as well. In support, he also placed reliance on the following judgments:- Reliance Industries Ltd. [2023-TIOL-1130-HC-AHM-CX] Reliance Industries Ltd. [Excise Appeal No. 89137 of 2013, Final Order No. A/86163/2023 dtd. 19.07.2023] Reliance Industries Ltd. [Excise Appeal No. 11697 of 2017, Final Order No. A/12628-12630/2021 dtd. 20.12.2021] Reliance Industries Ltd. [Excise Appeal No. 1498 of 2012, Final Order No. A/85909/2022 dtd. 26.09.2022] Reliance Industries Ltd. [Excise Appeal No. 532 of 2012, Final Order No. 85471-85472/ 2023 dtd. 14.03.2023 ] Sterling Gelatin [2015(320)ELT A343(SC)] Hindustan Zinc Ltd. [2014(303)ELT 321 (SC)] 2.4 He further submits that the Ld. Commissioner has erred in holding that Transaction Value of the exempted goods is to be considered in the formula for reversal of credit and not the assessable value . However the said issue is squarely covered by the decisions of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices, or input service used in or in relation to the manufacturer of exempted goods and their clearance upto the place of removal or for provision of exempted services except in the circumstances mentioned in sub-rule (2) : Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. (2) ******** (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow any one of the following options, as applicable to him, namely :- (i) pay an amount equal to six per cent of value of the exempted goods and exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of sub-rule (2), take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of said clause (a) and pay an amount as determined under sub-rule (3A) in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce shall, determine and pay provisionally, for every month, - (i) the amount equivalent to CENVAT credit attributable to inputs used in or relation to manufacture of exempted goods, denoted as A; (ii) the amount of CENVAT credit attributable to inputs used for provision of exempted services (provisional) = (B/C) multiplied by D, where B denotes the total value of exempted services provided during the preceding financial year, C denotes the total value of dutiable goods manufactured and removed plus the total value of output services provided plus the total value of exempted services provided, during the preceding financial year and D denotes total CENVAT credit taken on inputs during the month minus A; (iii) the amount attributable to input services used in or in relation to manufacture of exempted goods and their clearance upto the place of removal or provision of exempted services (provisional) = (E/F) multiplied by G, where E denotes total value of exempted services provided plus the total value of exempted goods manufactured and removed during the preceding financial year, F denotes total value of output and exempted services provided, and total value of dutiable and exempted g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of non-exempted goods removed or for the provision of non-exempted services and description of such non-exempted goods removed and non-exempted services provided; (v) CENVAT credit of inputs and input services lying in balance as on the date of exercising the option under this condition; (b) the manufacturer of final products or the provider of output service shall determine the credit required to be paid, out of this total credit of inputs and input services taken during the month, denoted as T, in the following sequential steps and provisionally pay every month, the amounts determined under sub-clauses (i) and (iv), namely :- (i) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services shall be called ineligible credit, denoted as A, and shall be paid; (ii) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services shall be called eligible credit, denoted as B, and shall not be required to be paid; (iii) cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on the input/input service even though used in the dutiable goods. Keeping the said view in mind, the substitution in sub-rule (3A) of Rule 6 was made. Therefore, the substituted provision of sub-rule (3A) shall have retrospective effect being clarificatory. In the case of GOI v. Indian Tobacco Association 2005 (187) E.L.T. 162 (S.C.) (supra), the Hon ble Supreme Court held that the word substitute ordinarily would mean to put (one) in place of another ; or to replace . In Black s Law Dictionary, Fifth Edition, at page 1281, the word substitute has been defined to mean To put in the place of another person or thing , 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 . By the reason of the amendment, no substantive right has been taken away nor any penal consequence has been imposed. Only an obvious mistake was sought to be removed thereby. As per this interpretation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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