2018 (3) TMI 1048 - AT - Central Excise

CENVAT credit - time limit - The case of the department is that as per N/N. 21/2014-CE (NT) dt.11.7.2014, the six months period prescribed for taking credit from the date of issue of invoices. Therefore the credit taken in the present case is after six months from the date of invoices issued in the month of March and April 2014. Held that - As per the facts of the case credit was taken in respect of the invoices issued in the month of March & April 2014 in November 2014. On going through the notification No. 6/2015-CE (NT) dt. 1.3.2015 the period available for taking credit is 1 year in terms of the notification, the invoices issued in the month of March and April 2014 become eligible for cenvat credit - in respect of those invoices the limitation of six months cannot be made applicable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of cenvat credit beyond the prescribed time limit as per Notification No. 21/2014-CE (NT) dt.11.7.2014.
- Applicability of the amended time limit of 1 year for taking credit from the date of issue of invoice as per Notification No. 6/2015 dt. CE(N) dt. 1.3.2015.
- Interpretation of procedural requirements under Rule 4 of Cenvat Credit Rules, 2004.
- Consideration of statutory records for availing cenvat credit.
- Impact of retrospective effect of notifications on credit availability.

Analysis:

The case involved a dispute regarding the availing of cenvat credit beyond the stipulated time limit as per Notification No. 21/2014-CE (NT) dt.11.7.2014, which prescribed a six-month period for taking credit from the date of issue of invoices. The appellant had availed credit during the period 1.11.2014 to 5.11.2014 on invoices issued in March and April 2014, which was beyond the specified time limit. The department disallowed the credit based on this discrepancy.

The appellant argued that the time limit had been amended to 1 year from the date of issue of invoice as per Notification No. 6/2015 dt. CE(N) dt. 1.3.2015. They contended that the six-month period under Rule 4 of Cenvat Credit Rules, 2004 was a procedural requirement and could not restrict the substantive right of availing modvat credit, citing a judgment of the Madhya Pradesh High Court. The appellant also emphasized that the notification could not have a retrospective effect and that there were no prescribed procedures for availing credit during the relevant period.

The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order, emphasizing the limitation provided by Notification No. 21/14-CE(NT) dt. 11.7.2014 and the appellant's failure to adhere to the prescribed time limit.

Upon careful consideration, the Member (Judicial) noted that the appellant was entitled to the cenvat credit. The Member observed that the amended notification No. 6/2015-CE (NT) dt. 1.3.2015 extended the period for taking credit to 1 year, making the invoices issued in March and April 2014 eligible for cenvat credit. Additionally, it was highlighted that the limitation under Notification No. 21/14-ST (NT) dt. 11.7.2014 should apply only to invoices issued after the notification date, and the absence of a prescribed time limit for earlier invoices precluded the applicability of the six-month restriction. The Member also considered the appellant's records as sufficient for recording cenvat credit, even though not entered in RG 23A Part-II, and concluded that there was no delay in availing the credit. Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed.