TMI Blog2005 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... versed in terms of endorsement dated 19-6-2000 issued by the Superintendent of Central Excise, Gulbarga. This petitioner did comply with this suggestion and reversed the Modvat credit and to this extent nothing remains. 3.However, the communication dated 19-6-2000 being on the premise that in terms of Section 112 of the Finance Act, 2000, such Modvat credit having been disallowed, the petitioner was advised to reverse the entry and it is only because of Section 112 of the Finance Act, 2000 the petitioner is losing the valid Modvat credit that it had availed of earlier and but for this provision, the petitioner could have continued to reap the benefit of Modvat credit and the petitioner therefore feeling aggrieved by this endorsement as also the provision of Section 112 of the Finance Act, 2000, has challenged the constitutional validity of this statutory provision and for quashing the consequential endorsement and further direction for restoration of the Modvat credit entry. 4.Likewise, in respect of the petitioner in W.P. No. 35767 of 2000, the disputes relates to availment of Modvat credit for the period September 1997 to December 1997. However, in this case, the availment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit or concession that had been given to an assessee under the Modvat credit scheme, particularly in respect of such assessees like the petitioner, the order of the Tribunal was required to be set aside and in this view of the development of law, it is urged by Sri Papegowda, learned ACGSC that the matter is covered by the decision of the Supreme Court and the writ petitions are to be dismissed. 6.Sri Pramod N. Kathavi, learned Counsel for the petitioners would urge that as the petitioner has been deprived of Modvat credit to which the petitioners are otherwise entitled to in terms of the rules governing allowing of Modvat credit, only because of the provisions of Section 112 of the Finance Act, 2000, the petitioners are entitled to question the legality of this provision and further submits that even the Supreme Court while disposing of the review petition in the case of Associated Cement Companies Ltd. (supra) having observed at Para 3 of this order that the Supreme Court has not examined the constitutional validity of Section 112 of the Finance Act, 2000 in this appeal and were not permitting any contentions questioning such validity to be raised in the appeal and that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitled to the availment of such Modvat credit, but the Tribunal had not invalidated any provisions of law or rule and therefore there was no occasion at all for the Parliament to have enacted a validating levy and if there was no occasion, the very provisions of Section 112 of the Finance Act, 2000 cannot be sustained inasmuch as it is the submission of learned Counsel for the petitioners that there was no cause of action for the Parliament to make such a law, which in effect and substance takes away certain benefits which had accrued to persons like the petitioners in the earlier existing valid notifications. It is therefore the submission of the learned Counsel for the petitioners that Section 112 of the Finance Act, 2000 is unconstitutional. 10.One other contention urged on behalf of the petitioners is that the statutory provision also has the effect of bringing about an invidious classification, discriminating between the assessees making use of inputs other than HSD oil for the purpose of generating electricity used in the manufacture of end product - cement - and the provisions having an ill-effect only on manufacturers of cement using HSD oil as an input for generation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 112 of the Finance Act, 2000 if one looks at it independent of its caption or title as validating levy etc., or as understood by the petitioners, as validating levy, it is only a provision which amounts to provision of law or rule made operational with retrospective effect having the effect of taking away a concession or exemption provided earlier. The only additional effect is that the subject matter statutory provision or notification under which the benefit is given or extended and such order, though might not have been subject matter of any decision of the court or Tribunal, nevertheless, the provision will have overriding effect for the purpose of denying the earlier concession. The provision of Section 112 of the Finance Act, 2000 reads as under : 112. Validation of the denial of credit of duty paid on high speed diesel oil. - (1) Notwithstanding anything contained in any rule of the Central Excise Rules, 1944, no credit of any duty paid on high speed diesel oil at any time during the period commencing on and from the 16th day of March 1995 and ending with the day the Finance Act, 2000 receives the assent of the President shall be deemed to be admissible. (2) An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... President, no such credit is admissible, in the sense that even if it had been admitted earlier, it is now taken away. 15.Sub-section (2) further effectuates this provision even in the context of any judgment, decree or order of any Court or Tribunal or any other authority etc. The net effect of the provision is it takes care of both the situations where Modvat credit had been availed either by the assessee himself on the strength of the notification issued under Rules 57A and 57B or even when such credit had not been allowed but having been made subject matter of an order or decision of any Court or Tribunal etc., had been extended the benefit of such Modvat credit, nevertheless even such benefit is now sought to be withdrawn or taken away. 16.Even on applying the test as laid down by the Supreme Court in the case of Sri Prithvi Cotton Mills Ltd. (supra), the provision of Section 112 of the Finance Act, 2000 achieves that very purpose which has been indicated by the Supreme Court to be the object and the purpose for which a validating levy can be made. If such is the law as laid down and declared by the Supreme Court on application of this provision, it inevitably follows tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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