Custom, Excise & Service Tax Tribunal
Cce Pune I vs M/S. Emcure Pharmaceuticals on 7 October, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/974/09 Mum
(Arising out of Order-in-Appeal No. PI/VSK/141/2009 dated 8.6.09 passed by the Commissioner of Central Excise (Appeals), Pune I)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
CCE Pune I
:
Appellant
Versus
M/s. Emcure Pharmaceuticals
Respondent
Appearance Shri Manish Mohan, SDR for Appellant Shri B. Raichandani, Advocate for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 07.10.10 Date of Decision : 07.10.10 ORDER NO.
Per : Ashok Jindal The short issue involved in this case is reversal of CENVAT credit of input where the assessee manufacture both dutiable and exempted product without maintaining separate account. In this case, the respondents were having a separate account for their inputs but they failed to maintain a separate account of input services and they reversed proportionately after availing the CENVAT credit of input service after removal of the goods. In the Budget 2010 an amendment has come in the Finance Act, 2010 with regard to Rule 6 of CENVAT Credit Rules, 2004, read with Schedule VIII which is reproduced herein as under:-
Amendment of rule?73. 6 of CENVAT Credit Rules, 2004. (1) In the CENVAT Credit Rules, 2004, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, as published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 600(E), dated the 10th September, 2004, rule 6 shall stand amended and shall be deemed to have been amended retrospectively, in the manner specified in column (3) of the Eighth Schedule, on and from and up to the corresponding date specified in column (4) of that Schedule against the rule specified in column (2) of that Schedule.
Where a person opts to pay the amount in accordance with?(2) the provisions as amended by sub-section (1), he shall pay the amount along with interest specified thereunder and make an application to the Commissioner of Central Excise along with documentary evidence and a certificate from a Chartered Accountant or a Cost Accountant, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of exempted goods, within a period of six months from the date on which the Finance Bill, 2010 receives the assent of the President.
The Commissioner of Central Excise shall, on receipt of an?(3) application under sub-section (2), verify the correctness of the amount paid within a period of two months from the date of receipt of the application and in case the amount so paid is found to be less than the amount payable, he shall call upon the applicant to pay the differential amount along with interest, which shall be paid within a period of ten days from the date of receipt of the communication from the Commissioner in this regard.
Notwithstanding anything contained in any judgment, decree?(4) or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done, at any time during the period commencing on and from the 10th day of September, 2004 and ending with the 31st day of March, 2008, relating to the provisions as amended by sub-section (1), shall be deemed to be and deemed always to have been, for all purposes, as validly and effectively taken or done as if the amendment made by sub-section (1) had been in force at all material times.
For the purposes of sub-section (1), the Central?(5) Government shall have and shall be deemed to have the power to make rules with retrospective effect as if the Central Government had the power to make rules under section 37 of the Central Excise Act, retrospectively, at all material times.
Explanation. For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had this section not come into force.
THE EIGHTH SCHEDULE [See section 73(1)] Sl. No. Provisions of CENVAT Credit Rules, 2004 to be amended Amendment Period of effect of amendment (1) (2) (3) (4) Rule 6 of the CENVAT Credit Rules, 2004 as published vide notification number G.S.R. 600(E), dated the 10th September, 2004 [23/2004-CENTRAL EXCISE (N.T.) dated the 10th September, 2004].
In the CENVAT Credit Rules, 2004, in rule 6, after sub-rule (6), the following sub-rule shall be inserted, namely : (7) Where a dispute relating to adjustment of credit on inputs or input services used in or in relation to exempted final products relating to the period beginning on the 10th day of September, 2004 and ending with the 31st day of March, 2008 (both days inclusive) is pending on the date on which the Finance Bill, 2010 receives the assent of the President, then, notwithstanding anything contained in sub-rules (1) and (2), and clauses (a) and (b) of sub-rule (3), a manufacturer availing CENVAT credit in respect of any inputs or input services and manufacturing final products which are chargeable to duty and also other final products which are exempted goods, may pay an amount equivalent to CENVAT credit attributable to the inputs or input services used in, or in relation to the manufacture of, exempted goods before or after the clearance of such goods :
Provided that the manufacturer shall pay interest at the rate of twenty-four per cent. per annum from the due date till the date of payment of the said amount.
Explanation. For the purpose of this sub-rule, due date means the 5th day of the month following the month in which goods have been cleared from the factory..
10th day of September, 2004 to the 31st day of March, 2008 (both days inclusive).
From the said amendment the position has been cleared in the Finance Act, 2010 that the reversal of CENVAT credit taken by the assessee on input or input services for dutiable as well as non-dutiable goods manufactured by them where they are not maintaining separate account, reversal of 10% after the clearance of the goods has been made retrospective effect. In this case, the respondent has reversed proportionately CENVAT credit availed on input service after clearance of their finished exempted goods. Hence, the issue has been settled in favour of the respondent by this amendment in the Finance Act, 2010 giving retrospective effect. Accordingly, the appeal filed by the Revenue deserves no merit and rejected.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk 4