2014 (7) TMI 30 - AT - Central Excise

CENVAT Credit - Suo moto credit - whether appellant can take suo-moto credit of an amount which was reversed earlier and as to after how much time such credit can be taken - Held that - appellant has clearly recorded in Statement of Service Tax Credit for the month of September, 2006 that a credit of service tax of Rs. 37,47,071/- and Education Cess Rs. 42,608, taken in September, 2005, is reversed and revised credit of service tax Rs.35,51,684/- and Education Cess Rs. 69,858 for the period from 10.09.2004 to 31.03.2005 and 01.04.2005 to 31.12.2005 is taken. It is observed that there is nothing on record before this bench to show whether the revised credit of Rs. 36,21,542/- taken in September, 2006 was supported by same set of duty paying documents on the basis of which credit was initially taken by the appellant in September, 2005 together with some more documents for the period from October, 2005 to December, 2005. While holding that the appellant could suo-moto take credit in the facts and circumstances of the case for correcting the quantum of admissible service tax credit in view of the decision of the High Court of Madras in the matter of ICMC Corporation Limited Vs. CESTAT, Chennai (2014 (1) TMI 1473 - MADRAS HIGH COURT), and other case laws relied upon by the appellant, the matter is remanded to the adjudicating authority for verification whether the CENVAT credit of Rs. 36,21,542/- taken by the appellant in September, 2006 corresponds to a set of CENVATABLE documents against which CENVAT Credit of Rs. 37,89,679/- was initially taken in September, 2005 together with CENVATABLE documents for the period from October, 2005 to December, 2005 as recorded in appellant s Statement of Service Tax Credit for the month of September, 2006. If the entire credit of Rs. 36,21,542/- is ultimately found to be based on the strength of CENVATABLE documents, the appellant would be entitled to take credit of the same under the CENVAT Credit Rules, 2004. as no time limit for taking credit has been provided in these Rules - Matter remanded back - Decided in favour of assessee.

Summary

Issues involved:
1. Whether the appellant can take suo-moto credit of an amount previously reversed.
2. Whether the time limit for taking credit applies in this case.
3. Whether the penalty under Section 11AC is imposable.

Analysis:
1. The appellant, a company, availed CENVAT Credit of service tax, reversed it, and then took credit again. The revenue claimed the credit was taken without proper documents. The appellant argued that the credit was supported by duty paying documents and cited relevant case laws. The issue was whether the appellant could take suo-moto credit. The High Court case of ICMC Corporation Ltd was cited, supporting the appellant's position. The Tribunal remanded the case to verify if the credit was supported by valid documents, allowing the appellant to take credit if proven.

2. The appellant argued that the demand was time-barred as the notice was issued after two years from taking credit. They cited case laws to support their claim. The Tribunal noted the absence of willful misstatement and suppression of facts and referred to relevant case laws. The Tribunal held that the extended period of limitation did not apply, and therefore, the penalty under Section 11AC was not imposable.

3. The Revenue contended that the appellant was not eligible for suo-moto credit without proper explanation and valid documents. The Tribunal examined the case records and found discrepancies in the documentation supporting the revised credit taken by the appellant. However, based on the judgment in the ICMC Corporation Ltd case, the Tribunal allowed the appellant to take credit if the documents were found to be in order. The appeal was allowed by remanding the case to the adjudicating authority for further verification and proceedings.

In conclusion, the Tribunal's judgment allowed the appellant the opportunity to prove the validity of the credit taken, considering the relevant case laws and the absence of willful misstatement. The case was remanded for further verification, emphasizing the importance of supporting documentation for availing CENVAT Credit.