2018 (5) TMI 397 - AT - Central Excise

CENVAT credit - denial on the ground of delay in taking the credit - in respect of the inputs received during the period from 1.4.2002 to 31.3.2006 availed the CENVAT Credit in September, 2006 and October, 2006 - Held that - the reason for non-availing the CENVAT Credit immediately is due to the confusion regarding the quantum of credit to be availed, which is attributed to the dutiable goods. There was involvement of exempted activities also - it cannot be said that the appellant have not made claim for the CENVAT Credit. It is obvious that when input is received, the same is entered in the records. Therefore, it cannot be said that the appellant have availed the credit belatedly or there is no claim of the CENVAT Credit by the appellant. CENVAT Credit cannot be denied only due to the delay in taking the credit, however, the facts regarding receipt and use of the inputs needs to be verified, which can be done on the basis of private records and the Books of Account maintained by the appellant - appeal allowed by way of remand.

Summary

Issues:
Delay in availing CENVAT Credit; Compliance with CENVAT Credit Rules; Admissibility of credit after 4 years; Verification of input receipt and use.

Analysis:
The case involved the appellant's delay in availing CENVAT Credit for inputs received between 1.4.2002 to 31.3.2006, leading to a denial by the department. The appellant argued that the delay was not intentional and was due to confusion regarding the quantum of credit to be availed for dutiable and exempted goods. They maintained private records and Books of Account, recording all transactions related to the credit. The appellant contended that there was no prescribed statutory record for maintaining the CENVAT Credit account, and hence, their private records sufficed for compliance. They cited relevant judgments to support their case.

The Revenue, represented by the Commissioner (AR), reiterated that as per CENVAT Credit Rules, immediate credit availing was mandatory, and a delay of almost 4 years contravened the rules. The Revenue argued that the submission regarding private records and Books of Account was raised for the first time in the appeal and should not be considered. They emphasized the applicability of Rule 11 of CENVAT Credit Rules, 2004, only when credit is taken immediately at the time of receipt, citing relevant judgments to support their stance.

The Tribunal considered both sides' submissions and focused on determining whether the appellant could be debarred from availing CENVAT Credit due to the delay in credit availing. The Tribunal noted that the delay was due to confusion regarding the credit quantum for dutiable goods, with involvement in exempted activities. The appellant had corresponded with the department, maintaining records of all input receipts in private records and Books of Account. The Tribunal observed that the denial of credit solely based on delayed availing was not justified, emphasizing the importance of verifying input receipt and use based on the maintained records.

Consequently, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh order. The Tribunal directed the adjudicating authority to verify the input receipt and use based on the private records and Books of Account maintained by the appellant. The adjudicating authority was instructed to pass a de novo order within three months from the date of the Tribunal's decision due to the case's age. Ultimately, the appeal was allowed for remand to the adjudicating authority.