2011 (7) TMI 333 - AT - Central Excise

Eligibility of Cenvat credit - Respondent had taken credit of service tax in respect of goods transport agency service and maintenance & repair service for the period from 31.12.06 to February 2008 in the month of March 2008 - Proceedings were initiated by the Revenue to disallow the cenvat credit so availed on the ground that cenvat credit was not availed immediately after the payment of the bills and the service tax - As the Board in Circular dated 29.08.2000 F.No.345/2/2000-TRU dated 29.08.2000, in para 10 it has been observed The idea is that if the manufacturer desires he can take the CENVAT credit at the earliest opportunity when the inputs are received in the factory - This, however, does not mean, nor is it even intended that if the manufacturer does not take credit as soon as the inputs are received in the factory, he would be denied the benefit of CENVAT credit - Such an interpretation is not tenable - Decided inb favour of assessee.

Summary

Issues:
1. Disallowance of cenvat credit for service tax availed on goods transport agency service and maintenance & repair service.
2. Applicability of time limit for availing cenvat credit.
3. Interpretation of decisions in similar cases.
4. Legal correctness of reasons for non-availment of credit.
5. Relevance of circular issued by the Central Board of Customs & Excise.

Detailed Analysis:

1. The respondent had taken credit of service tax for a specific period, but the Revenue initiated proceedings to disallow the cenvat credit due to a delay in availing it after the payment of bills. The original adjudicating authority disallowed the credit and imposed a penalty, which was set aside by the Commissioner (Appeals), leading to the Revenue's appeal against this decision.

2. The Revenue argued that the credit should have been availed within a reasonable period, citing various decisions and the Supreme Court's judgment in a specific case. However, the advocate for the respondent presented Tribunal decisions supporting the view that credit can be taken at any time, and also highlighted a previous Tribunal decision in their favor regarding the time limit for availing credit.

3. The presiding member analyzed the arguments and referred to the Supreme Court's decision in another case to emphasize that there is no specific time limit prescribed for availing credit. The member disagreed with the Revenue's stance on distinguishing previous cases and emphasized the need to consider the legality of imposing restrictions on credit availing.

4. The member further discussed the relevance of various decisions cited by both parties, noting differences in the composition of the benches delivering those decisions. The member also highlighted a circular issued by the Central Board of Customs & Excise, which supported the idea that denial of credit due to delayed availing is not tenable.

5. After thorough consideration of the arguments and legal principles, the member found no merit in the Revenue's appeal and consequently rejected it. The decision was based on the lack of a legal basis for imposing a time limit on availing cenvat credit, as supported by legal precedents and official circulars.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the reasoning behind the decision rendered by the Appellate Tribunal CESTAT, AHEMDABAD.