2016 (1) TMI 1011 - AT - Central Excise

Cenvat credit lying unutilized in stock on 1.3.2003 denied - appellant has availed credit after a gap of one year - Held that - As per Rule 3(1) of Cenvat Credit Rules, 2002 the appellant is entitled to Cenvat credit on the inputs in question which were either available in stock or in process or were contained in the final product lying in stock as on 1-3-2003, Thus, viewing the problem from any angle the appellant is entitled to claim Cenvat credit under Rule 3 of Cenvat Credit Rules, 2002. Accordingly, the issue is decided in favour of the Appellant. Reasonable time for availing the credit - Held that - There is no time limit prescribed under Cenvat Credit Rules, 2002 during the impugned period, therefore the appellant is entitled to take credit. Decided in favour of the appellants.

Summary

Issues:
1. Entitlement to cenvat credit under Rule 3(2) of Cenvat Credit Rules, 2002.
2. Entitlement to take credit within a reasonable time.

Entitlement to Cenvat Credit under Rule 3(2) of Cenvat Credit Rules, 2002:
The case involved an appeal against the denial of cenvat credit to the appellant for unutilized credit in stock on 1.3.2003. The appellant, a manufacturer of medical disposal syringes, had initially paid duty at 4% without availing cenvat credit on inputs. Subsequently, they availed the benefit of Notification No.10/03-CE, paying duty at 8% and claiming cenvat credit on inputs in stock. The issue was whether the appellant was entitled to this credit. The Tribunal referred to previous cases and held that the appellant was entitled to claim cenvat credit under Rule 3(2) of Cenvat Credit Rules, 2002. The Tribunal emphasized that the appellant's situation fell within the scope of Rule 3(2) as the exemption from excise duty on the final product was partially withdrawn from 1-3-2003, justifying the appellant's claim for cenvat credit on inputs in stock.

Entitlement to Take Credit within a Reasonable Time:
The second issue revolved around whether the appellant availed the credit within a reasonable time. The Tribunal cited Rule 4 of the Cenvat Credit Rules, emphasizing that there was no specific time limit for availing cenvat credit on inputs. The Tribunal clarified that the rule allowed manufacturers to take credit immediately upon receipt of inputs, without specifying a deadline. Relying on previous decisions and circulars, the Tribunal concluded that the absence of a prescribed time limit meant the appellant was entitled to take credit. Additionally, the Tribunal noted valid reasons for the delay in availing the credit, such as unfavorable judgments that were later overturned. Consequently, the Tribunal held in favor of the appellant on this issue as well, setting aside the impugned order.

In conclusion, the Tribunal allowed the appeal, confirming the appellant's entitlement to cenvat credit under Rule 3(2) and ruling that there was no specific time limit for availing the credit under the Cenvat Credit Rules, 2002. The judgment highlighted the appellant's compliance with the rules and justified their right to claim the credit, ultimately overturning the previous decisions against the appellant.