Custom, Excise & Service Tax Tribunal
M/S. Enershell Alloys & Steel Pvt Ltd vs Commissioner Of Central Excise on 14 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. II
Excise Appeal No. 2540 of 2012
[Arising out of Order-In-Appeal No. 70-CE/MRT-1/2012 dated 15/3/2012 passed by Commissioner of Central Excise (Appeals) Meerut I, UP]
For approval and signature:
Honble Mr Ashok Jindal, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Enershell Alloys & Steel Pvt Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent
Meerut I Appearance:
Ms. Rinki Arora, Advocate for the Appellants Shri Devender Singh, AR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing /decision: 14. 5.2015 ORDER NO. FO/A 51673/2015 SM Per Ashok Jindal :
The appellant is in appeal against the impugned order wherein the Cenvat credit on steel items has been denied to the appellant for the period February, 2009 to June, 2009.
2. The facts of the case are that the appellant is manufacturer of MS ingots and MS bars. During the period February, 2009 to June, 2009, the appellant procured certain steel items which were used by the appellant for fabrication of capital goods as well as for supporting structures. During the course of Audit, this fact was revealed to the Revenue and therefore relying on the decision of Vandana Global Ltd. of Larger Bench of this Tribunal as reported in [2010 (253) ELT 440 (Tri-LB)] a show cause notice was issued to the appellant to deny the Cenvat credit to the appellant on these steel items on the premise that as these steel items are used for fabrication of supporting structures which were embedded to earth, therefore appellant is not entitled to take Cenvat credit. The lower authorities denied the Cenvat Credit to the appellant. Consequently, the demand along with interest and penalty was also imposed by the adjudicating authority which has been set aside by learned Commissioner (Appeals).
3. Learned Counsel for the appellant submits that in this case the explanation 2 of Rule 2(k) has come into force with effect from 7.7.2009 and prior to that they were entitled to take Cenvat credit on these items. She further submits that reliance of the Revenue on the decision of Vandana Global Ltd (supra) has been examined by the Honble High Court of Gujarat in the case of Mundra Ports & Special Economic Zone Ltd. vs. CCE in Tax Appeal No. 15/2009 vide order dated 29.4.2015 held that clarification dated 7.7.2009 to the explanation 2 of Rule 2(k) is prospective and not retrospective. Therefore, decision of Larger Bench of this Tribunal is not holding good as on date therefore she prayed that the impugned order be set aside and appeal be allowed.
4. On the other hand, learned AR submits that Honble High Court has observed these findings in a case where Cenvat credit on input service was in dispute, same is not applicable to facts of this case.
5. Heard the parties. Considered the submissions.
6. After hearing both the parties, I find that the only issue before me is whether explanation 2 to Rule 2 (k) dated 7.7.2009 is clarificatory or not. Honble High Court of Gujarat has observed as under :
We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7.7.2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the legislature wants to clarify the provision , it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Ltd. vs. Union of India and others reported in (2011) 11 SCC 408 would not be applicable to the facts of the instant case.
7. As Honble High Court has observed that explanation 2 to Rule 2(K) is having prospective effect. Therefore, for the period prior to 7.7.2009 Cenvat credit cannot be denied to the appellant. With these observations, I hold that appellant has taken the Cenvat credit correctly and are not required to reverse the same. Therefore, impugned order is set aside and appeal is allowed with consequential relief, if any.
( Dictated and pronounced in the open court )
( Ashok Jindal ) Member(Judicial)
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