SRI VENKATESWARA CO. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I am of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with pre -deposit, I proceed to dispose of the appeal.

(2.) THE appellant had taken Cenvat credit on MS Wire rods received from the manufacturer thereof during 29 -5 -2003 to 31 -3 -2004, amounting to Rs. 57,309/ -. The Department took the view that the activity of drawing wires, which was performed by the supplier and resulted in the emergence of the above wire rods did not amount to manufacture within the meaning of Section 2(f) of the Central Excise Act and, therefore, the goods supplied was not dutiable and consequently not Cenvatable. On this basis, the Department by a show -cause notice asked the appellant to reverse the above credit as also to pay interest thereof. This demand was contested. The lower authorities rejected this contest and upheld the above view of the Department. Hence this appeal.

(3.) LD . Counsel for the appellant is armed with a retrospective amendment of Rule 16 of the Central Excise Rules, 2002, which, prior to the amendment, was pari materia with the substantive provisions of the erstwhile Rules 173H and L of the Central Excise Rules, 1944. The amendment added the following provisos to Sub -rule 3 of Rule 16 ibid: Provided that for the purpose of this rule, "assessee" shall include wire drawing units, which has cleared the goods on payment of an amount equal to the duty at the rate applicable to drawn wire on the date of removal and on the value determined under relevant provisions of the Act and the rules made thereunder: Provided further that the amount paid under the first proviso shall be allowed as CENVAT credit as if it was duty paid by the assessee who removes the goods. The amendment was to take effect for the period 29th day of May, 2003 to 8th day of July, 2004 (both days inclusive). The period of dispute in the present case (29 -5 -2003 to 31 -3 -2004) is comprised within this period. Ld. Counsel submits that, by virtue of the above amendment to Rule 16, the appellant was entitled to Cenvat credit of the duty paid on the MS Wire rods by the supplier. Ld. SDR has also perused the provisions extracted above and has fairly acknowledged the retrospective effect thereof covering the period of dispute in this case.