We are pleased to release a Tax Alert which gives an update on the recent decision of the Karnataka High Court [2014 (9) TMI 633]
In the instant case, the assessee , engaged in the manufacture of excisable goods, availed CENVAT credit of duty paid on inputs and cleared goods to SEZ developers without payment of duty.The Revenue raised demand on the assesse towards reversal of CENVAT credit on the grounds that the amendment in Rules granting benefit of non-reversal of CENVAT credit for clearances to SEZ developers, is prospective in effect.
The High Court upheld the decision of the CESTAT, and confirmed that the amendments in Rule 6(6)(i) of the CCR are retrospective in effect and the benefit of non-reversal of CENVAT credit has to be extended for clearances to SEZ developers during the period prior to amendment.
In the instant case, the assessee , engaged in the manufacture of excisable goods, availed CENVAT credit of duty paid on inputs and cleared goods to SEZ developers without payment of duty.The Revenue raised demand on the assesse towards reversal of CENVAT credit on the grounds that the amendment in Rules granting benefit of non-reversal of CENVAT credit for clearances to SEZ developers, is prospective in effect.
The High Court upheld the decision of the CESTAT, and confirmed that the amendments in Rule 6(6)(i) of the CCR are retrospective in effect and the benefit of non-reversal of CENVAT credit has to be extended for clearances to SEZ developers during the period prior to amendment.
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