2018 (10) TMI 1367 - AT - Central Excise

CENVAT Credit - time limit of invoices raised - the invoices, on the basis of which the credit was availed, was older than six months - N/N. 21/2014-CE(NT) dated 11.07.2014 made effective w.e.f. 01.09.2014. CENVAT Credit - capital goods - availment of credit of 50% of the balanced credit required to be availed in the subsequent financial year - Held that - Even though there is no such amendment in Rule 4 for availing the Cenvat credit of duty paid on the capital goods within a period of six months, the same stands denied by Commissioner (Appeals) even after observing that there is no such requirement of law - there is no justification for denial of credit - credit allowed. Whether the demand is barred by limitation? - Held that - The entire credit was availed by the appellant by reflecting the same in their Cenvat credit records. As such, there cannot be held to be any suppression or misstatement on their part with a malafide intention so as to invoke the longer period of limitation - the demand having been raised beyond the normal period of limitation is barred. Appeal allowed - decided in favor of appellant.

Summary

Issues: Availment of Cenvat credit on raw materials beyond six months, availment of Cenvat credit on capital goods, applicability of notification, limitation period for demand.

Availment of Cenvat credit on raw materials beyond six months:
The appellants availed Cenvat credit on raw materials beyond the stipulated six-month period, leading to objections from the audit. The revenue contended that such credit was inadmissible due to being availed beyond the prescribed time limit. The appellant argued that the restriction imposed w.e.f. 01.09.2014 should not apply retrospectively to invoices issued before that date. The Tribunal referred to a previous case, M/s Voss Exotech Automotive Pvt. Ltd. Vs Commissioner of Central Excise, Pune-I, where it was held that the time limit specified in Notification No.21/2014-CE(NT) dated 11.07.2014 should apply only to invoices issued after the notification date. Consequently, the Tribunal ruled in favor of the appellant, stating that the restriction did not apply to invoices issued before 01.09.2014.

Availment of Cenvat credit on capital goods:
The appellant also availed Cenvat credit on capital goods, which was 50% of the remaining balance required to be availed in the subsequent financial year. Despite no specific amendment in Rule 4 regarding availing Cenvat credit on capital goods within six months, the Commissioner (Appeals) denied the credit. The Tribunal found no justification for this denial, emphasizing that there was no legal requirement for such restriction. Therefore, the Tribunal ruled in favor of the appellant regarding the availment of Cenvat credit on capital goods.

Applicability of notification:
The Tribunal clarified that the notification restricting the time limit for availing Cenvat credit should not be applied retrospectively to invoices issued before the notification date. The decision in a previous case supported this interpretation, emphasizing that the limitation of six months could not be imposed on invoices issued prior to the notification. This clarification favored the appellant's argument against the applicability of the notification to invoices issued before 01.09.2014.

Limitation period for demand:
The Tribunal also considered the limitation period for the demand raised against the appellant. It was noted that the appellant had reflected the availed credit in their Cenvat records without any suppression or misstatement. The revenue failed to provide evidence of malafide intention on the part of the appellant, leading the Tribunal to conclude that the demand raised beyond the normal limitation period was barred. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief.