2017 (6) TMI 266 - AT - Central Excise

CENVAT credit - cancellation of invoices - Revenue has denied such recredit only on the reason that the credit has been taken after a lapse of as much as 16 months - Held that - the decision of the Tribunal in the case of Coromandel Fertilizers Ltd. 2008 (8) TMI 333 - CESTAT, BANGALORE , is on identical facts, where it was held that When the law is settled on the issue, there is no justification to deny the credit on the ground that it is availed after a long time - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Denial of CENVAT credit for cancelled invoices
- Interpretation of Rule 173G(2)(vi) regarding recredit timeline

Analysis:
1. The appeal challenged the denial of CENVAT credit for two cancelled invoices dated 8/12/2000, amounting to ?11,85,441, due to non-clearance of consignments from the factory. The appellant eventually recredited the duty paid on the cancelled invoices after a 16-month delay, leading to the revenue disallowing the credit. The original authority imposed a penalty, which was set aside in the Order-in-Appeal.

2. The appellant contended that the recredit was unjustly denied, arguing that the credit should have been availed immediately after notifying the proper officer. Citing the case law of Coromandel Fertilizers Ltd. Vs. CCE(A), the appellant sought relief.

3. Revenue, represented by Dr. J. Harish, Deputy Commissioner(AR), maintained the findings of the impugned order, leading to a legal dispute over the recredit timeline.

4. The Tribunal analyzed Rule 173G(2)(vi), which allows for recredit if duty is debited and invoices are cancelled, requiring intimation to the proper officer the next working day. The revenue denied recredit solely due to the 16-month delay, despite no specific outer time limit in the rule.

5. Referring to precedents like CCE v. Raghuvar (India) Ltd. and other cases, the Tribunal emphasized that unless a specific time limit is prescribed, no implied time limit should be imposed. Considering the uncertainty and absence of a time limit in the Cenvat Credit Rules, the Tribunal found no merit in denying credit based on the delay. Relying on the Coromandel Fertilizers Ltd. case, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.

6. Ultimately, the Tribunal followed the Coromandel Fertilizers Ltd. case precedent, concluding that there was no justification to deny credit based on the delay. The impugned order was set aside, and the appeal was allowed with any necessary consequential reliefs.