Recovery Mechanism for 8% (10%) under Rule 6 of the Cenvat Credit Rules – Due Course means five years for the Board.
By Circular No. 739/2003 dated 28.8.2003, the CBEC had informed that the issue relating to payment of 8% in terms of rule 6 of CENVAT Credit Rules, 2001 and rule 57CC of erstwhile Central Excise Rules, 1944 was not free from doubt in view of the Tribunal judgment in the case of Pushpam Forgings vs. Commissioner of Central Excise, Mumbai-II and accordingly the Board had informed the field formations that matter would be further examined by the Board and the decision taken shall be communicated in due course.
The decision was either not taken in due course or not communicated in due course . It seems some vigilant field formations have reminded the Board about this due course commitment.
Now after five years, Board has woken up from its deep slumber and informs the field that the issue had been settled by the retrospective amendments in the Finance Act, 2005 (Sections 82 and 83) which provided for recovery mechanism, if the assessee does not pay the required amount of 8%.
Therefore, Board requests that cases, if any, kept pending on this issue in terms of Board's Circular dated 28.8.2003, may be adjudicated in the light of the retrospective amendment carried out in the Finance Act, 2005.
Board is hopeful that adjudications must be pending for more than three years.
However it must be said to the credit of the field officers that they do not have much respect for Board instructions and most often treat them with contempt. So, many of them have not waited for the due course clarification of the Board and have adjudicated the cases based on the 2005 Finance Act amendments.
CBEC . F. No. 267/22/2008- CX -8 , Dated April 3, 2008