2009 (1) TMI 605 - AT - Central Excise

Cenvat/Modvat - Limitation - Delayed availment of credit - Held that - there is no provision for denying credit because of delay nor there is any time limit for taking credit in the Cenvat credit Rules and therefore, the stand taken by the Revenue that credit has to be taken within a reasonable period has no basis - appeal dismissed - decided against Revenue.

Summary

Issues: Delayed availment of Cenvat credit of duty on services received for manufacturing activities.

Analysis:
The appeals were filed against the Commissioner (Appeals) order allowing the delayed availment of Cenvat credit of duty on services related to manufacturing activities. The Learned Departmental Representative (DR) argued that the appellants should have taken the credit within a reasonable time, as per Rule 4(1) of the Cenvat Credit Rules, citing a Tribunal decision in another case. On the contrary, the Consultant for the respondent contended that the said rule does not apply to input services and that the rule does not prohibit taking credit subsequently. The Consultant referred to the CBEC's Excise Manual, which clarifies that there is no denial of credit benefits if not taken immediately upon receipt of inputs. The Tribunal noted that there is no provision in the Cenvat Credit Rules for denying credit due to delay, and no time limit is specified for taking credit. The Tribunal agreed with the Consultant's argument that the Revenue's stance on the need for immediate credit-taking lacked a legal basis. Consequently, the appeals filed by the Commissioner were deemed meritless and rejected, with the cross-objections also being disposed of accordingly.