Page 85 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] NELCO LTD. v. UNION OF INDIA 43
Rule 4 of the erstwhile CENVAT Credit Rules, 2004. It is also argued by Mr.
Anil Singh that when in a Value Added Tax there was a restriction on avail-
ing of credit in law, now, there is a substantive provision in the new law.
However, it is only the transitional provision which inserts or incorporates
the above condition, as the Legislature deemed it fit and proper to enforce
the new regime from 1-7-2017. When the new regime replaces a bundle of
legislations seeking to tax the activity of manufacturers, sales and extension
of service, then, it was deemed fit and proper that the transition to the new
regime, from the old one, should be smooth. For it to be smooth and proper, a
restriction has been placed on availment of CENVAT credit during the transitional
period and by making the above statutory prescription. Mr. Anil Singh would
submit that it is entirely for the Legislature to make such a provision and its power
in that behalf is not questioned. If there is no challenge to the impugned condi-
tion on the ground of competence of the Legislature, then, the competent
Legislature could have made a restrictive provision and which is precisely
the intent. The transition from the old regime to the new one should be
smooth and expedient. Hence, a reasonable period of twelve months has
been provided. Why it is only twelve months and why it does not date back
to the stage, the petitioners in these petitions would deem it fit and proper,
is not the test which can be evolved and applied for considering the consti-
tutionality of the legislation. Ultimately, it is the Legislature which is the
best Judge and in its wisdom, insofar as fiscal policies are concerned, it has
imposed this condition. That is, therefore, reasonable and as explained in
the affidavit in reply. On all counts, therefore, the challenge is devoid of
merits according to Mr. Anil Singh and it deserves to be repelled.”
(emphasis supplied)
Therefore, the issue as to the input credit contemplated under transitional provi-
sion being a concession or right was squarely put forth for consideration. The
Division Bench analyzed the decisions on the subject of the Supreme Court in
Jayram and Company v. Assistant Commissioner & Anr. [(2016) 15 SCC 125 = 2018
(19) G.S.T.L. 3 (S.C.)], Eicher Motors Ltd. v. Union of India [1999 (106) E.L.T. 3
(S.C.)], Osram Surya (P) Ltd. v. Commissioner of Central Excise, Indore [2002 (142)
E.L.T. 5 (S.C.)], Samtel India Ltd. v. Commissioner of Central Excise, Jaipur [2003
(155) E.L.T. 14 (S.C.)] and concluded by observing thus :-
“56. To our mind, therefore, the Learned Additional Solicitor General is right in
his contention that CENVAT credit is a mere concession and it cannot be claimed
as a matter of right. If the CENVAT Credit Rules under the existing legisla-
tion themselves stipulate and provide for conditions for availment of that
credit, then, that credit on inputs under the existing law itself is not a abso-
lute but a restricted or conditional right. It is subject to fulfilment or satis-
faction of certain requirements and conditions that the right can be availed
of. It is in these circumstances that we are unable to agree with the Counsel ap-
pearing for the petitioners that the impugned condition defeats any accrued or vest-
ed right. It was never vesting in them in such absolute terms, as is argued before
us. If the existing law itself imposes condition for its enjoyment or avail-
ment, then, it is not possible to agree with the Counsel that such rights un-
der the existing law could have been enjoyed and availed of irrespective of
the period or time provided therein. The period or the outer limit is pre-
scribed in the existing law and the Rules of CENVAT credit enacted there-
under. In the circumstances, it is not possible to agree with the Counsel ap-
pearing for the petitioners that imposition of the condition vide Clause (iv)

GST LAW TIMES  7th May 2020  85