2017 (2) TMI 534 - AT - Central Excise

Cenvat Credit - Rule 6(2) of Cenvat Credit Rules, 2004 - Separate account for dutiable and exempted goods - Held that - In the present appeal for the said inputs there was no need for maintenance of separate accounts and it is undisputed that the respondent has availed Cenvat Credit only on such quantity of inputs which were used for manufacture of dutiable final products - Further as held by Division Bench of this Tribunal in the case of Steel Authority India Ltd. 2013 (3) TMI 115 - CESTAT NEW DELHI , there was no time limit during the relevant period for availment of Cenvat Credit after the receipt of inputs into the factory - Decided in favor of the assessee.

Summary

Issues:
- Admissibility of Cenvat Credit for furnace oil used in manufacturing dutiable and exempted final products
- Requirement of maintaining separate accounts for Cenvat Credit
- Time limit for availing Cenvat Credit after the receipt of inputs

Admissibility of Cenvat Credit: The case involved an appeal by Revenue against an Order-in-Original passed by the Commissioner of Central Excise, Ghaziabad. The dispute revolved around the admissibility of Cenvat Credit amounting to ?78,71,907 availed and utilized by the respondents for using furnace oil in the manufacture of both dutiable and exempted final products. The Revenue contended that the credit was inadmissible since the respondents did not maintain separate accounts for the duty paid on furnace oil used in the exempted final products. Additionally, the Revenue alleged that the credit was not taken immediately upon receipt of inputs, as required. The Original Authority allowed the Cenvat Credit, stating that there was no provision in the Cenvat Credit Rules for denying credit after a gap of more than one year, and there was no prescribed time limit for availing credit on inputs or capital goods.

Requirement of Separate Accounts: The Revenue argued that the lack of separate accounts rendered the attributable Cenvat Credit inadmissible to the respondents. However, the respondents contended that Sub-Rule 2 of Rule 6 of the Cenvat Credit Rules, 2004 only required separate accounts when credit was taken on all inputs used in both dutiable and exempted final products. Since the respondents only availed credit on inputs used for dutiable final products, separate accounts were unnecessary. The Tribunal concurred with the respondents, emphasizing that maintenance of separate accounts was not required in this scenario.

Time Limit for Availing Cenvat Credit: The Revenue further contended that the Cenvat Credit not immediately taken by the respondents was inadmissible. However, the Tribunal referenced a previous case where it was held that there was no time limit during the relevant period for availing Cenvat Credit after the receipt of inputs into the factory. Therefore, the Tribunal rejected the Revenue's appeal, stating that the grounds raised were not sustainable, and the respondents were entitled to consequential relief. The judgment highlighted the specific provisions of the Cenvat Credit Rules and relevant case law to support its decision.