2019 (1) TMI 1426 - AT - Central Excise

CENVAT Credit - invoices were more than one year old - time limit for issuance of invoice - Held that - The SCN has alleged that the cenvat credit has wrongly been taken by the appellant on the ground that invoices were more than one year old. Limitation of one year for availing credit from the date of invoice came into statute only in the year 2015. It was vide Notification No. 21/14 dated 01.09.2014 that the limitation period of six months was introduced into statute for the impugned periods. This observation is a definite ground to hold that SCN has been issued based on wrong facts. Since SCN is the foundation of the Revenue case, the adjudication cannot sustain where SCN is issued on wrong facts. Confirmation of demand only for want of the requisite documents - Held that - The only relevant document for the purpose is the invoice. Apparently and admittedly, four of the impugned invoices are very much recorded in Annexure A of the SCN itself. Perusal of the individual invoice reflects the clear mention of material also being received on the date of invoice itself. All the four invoices are issued prior 01.09.2014 i.e. prior date when for the first time the concept of limitation for availing credit was introduced - order set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availing cenvat credit on invoices more than one year old.
2. Interpretation of limitation period for taking credit.
3. Sufficiency of evidence for availing credit.
4. Adjudication based on incorrect facts in Show Cause Notice (SCN).

Analysis:
1. The appellant was engaged in manufacturing filter bags and availing cenvat credit under Cenvat Credit Rules, 2004. The Department observed that the appellant had wrongly taken input credit of ?4,53,909 on invoices more than one year old. The demand to recover the credit along with interest and penalty was confirmed by the initial Order-in-Original and reconfirmed later.

2. The appellant argued that the concept of limitation for taking cenvat credit was introduced through Notification No. 21/14 dated 01.09.2014, which stipulated a six-month period for taking credit from the date of the invoice. Since the invoices in question were issued prior to this notification, the time limitation should not apply. The appellant also contended that the Commissioner (Appeals) wrongly stated that there was a lack of evidence regarding the receipt of material before the notification date.

3. The Department justified the order, emphasizing that the Commissioner did not dispute that the invoices were issued before the notification date but declined relief due to insufficient documents/evidence. The Department argued that the order was sustainable and the appeal should be dismissed.

4. The Tribunal observed that the SCN alleged the wrongful availing of cenvat credit based on invoices more than one year old. However, the limitation of one year for availing credit was introduced in 2015, not at the time the invoices were issued. The Tribunal held that issuing the SCN on incorrect facts rendered the adjudication unsustainable. Additionally, the Tribunal found that the relevant documents, i.e., the invoices, were available and clearly indicated that the material was received on the date of the invoice itself, which was before the introduction of the limitation period. The Tribunal referred to a previous decision supporting the admissibility of credit for invoices issued before the limitation period, ultimately setting aside the order under challenge and allowing the appeal.

This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the arguments presented by both parties and the Tribunal's reasoning leading to the final decision.