2019 (4) TMI 473 - AT - Central Excise

CENVAT Credit - invoices issued prior to six months - Rule 4 (7) of CCR - applicability of NN dated 11/07/2014 - due to clerical oversight CENVAT credit entries in the CENVAT account could not be made immediately - Held that - Similar issue arose before this Tribunal, in the coordinate Bench decision in the case of M/s VOSS EXOTECH AUTOMOTIVE PVT. LTD. V/s CCE, PUNE-I 2018 (3) TMI 1048 - CESTAT MUMBAI wherein it had been held that the said provision amendment has got only prospective effect and no retrospective effect can be given, and accordingly for the goods and invoices received prior to 1st September, 2014/ 11th July 2014 the Cenvat Credit can be taken being a vested right. The said Proviso inserted by N/N. 21/2014 will have prospective effect only. Thus, CENVAT CREDIT taken by the appellant is held to be in order - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the appellant's taking of cenvat credit on invoices received during specific periods is hit by the amendment in Rule 4 (7) by insertion of the 6th Proviso.
- Whether the provision of the amendment should be applied retrospectively.
- Whether the CENVAT credit taken by the appellant during a certain period is admissible.

Analysis:
1. The appellant, a manufacturer, availed cenvat credit on invoices received between August 2013 to January 2014 and January 2015. The amendment in Rule 4 (7) inserted a proviso restricting credit after six months of the date of issue of specified documents. The appellant received inputs against 57 documents during the mentioned period but made credit entries later due to a clerical oversight.

2. The department raised concerns regarding the inadmissibility of the credit taken post-amendment. The appellant contested the Show Cause Notice (SCN) on merits and limitation, disputing the applicability of the amendment. The original authority confirmed the recovery of disputed credit along with penalties.

3. The appellant appealed to the Commissioner (A), who upheld the applicability of the amendment retrospectively. The appellant then approached the Tribunal, arguing against the retrospective application of the amendment and asserting vested rights in availing cenvat credit.

4. The Tribunal considered similar precedents where amendments were held to have prospective effect only. Referring to a specific case, the Tribunal emphasized that a statutory right vested before an amendment cannot be divested unless expressly provided. The Tribunal concluded that the amendment in this case would have prospective effect only.

5. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential benefits to the appellant. The Tribunal held that the appellant's cenvat credit was in order and not affected by the retrospective application of the amendment.

In summary, the Tribunal ruled in favor of the appellant, holding that the amendment restricting cenvat credit had prospective effect only. The appellant's right to avail credit on invoices received before the effective date of the amendment was deemed vested and protected. The judgment emphasized the principle that existing rights cannot be curtailed by subsequent amendments unless expressly provided.