2019 (5) TMI 1427 - AT - Central Excise

CENVAT Credit - Rule 4(7) of CCR 2004 - Whether the appellant is entitled to take Cenvat Credit on Input Service Distributor (ISD) invoice received from their Head Office which was issued after 01.09.2014 beyond the period of six months from the date of the input invoices? - HELD THAT - It is not in dispute that as manufacturer the appellant have availed Cenvat Credit within six months from the date on which they received the ISD invoices which are one of the documents specified in Rule 9(1). The Head Office of the appellant who are registered as ISD have availed Cenvat Credit beyond the period of six months - there is no restriction has been placed on availment of Cenvat Credit by ISD during the relevant period under this proviso. The appellant is entitled to avail Cenvat Credit and therefore the impugned order is unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is entitled to take Cenvat Credit on Input Service Distributor (ISD) invoice received after 01.09.2014 beyond six months from the date of the input invoices.

Analysis:
The issue in this case revolves around the entitlement of the appellant to avail Cenvat Credit on ISD invoices received from their Head Office after 01.09.2014 beyond the stipulated six-month period. The proviso to Rule 4(7) of Cenvat Credit Rules, 2004, inserted from 01.09.2014, restricts the manufacturer or provider of output service from taking Cenvat Credit after six months from the date of specified documents. The appellant availed Cenvat Credit within six months from the date of ISD invoices, which are valid under Rule 9(1)(g). However, the Head Office issued invoices between 01.10.2014 and 18.04.2015, transferring them to the appellant after six months, leading to a show cause notice for reversal of Cenvat Credit. The appellant argued that for invoices issued pre-01.09.2014, the proviso should not apply retrospectively, as there was no indication for such application. They contended that the fault lay with the Head Office, and the restriction did not apply to ISDs. The departmental representative emphasized the proviso's strict application post-01.09.2014, regardless of invoice issuance date.

The tribunal analyzed the proviso's language, noting it restricts the manufacturer or output service provider without mentioning ISDs. While equity principles suggest equal treatment, fiscal statutes demand strict interpretation. As the appellant availed Cenvat Credit within six months of receiving ISD invoices, which are valid documents, the tribunal found no restriction for ISDs under the proviso during the relevant period. Consequently, the tribunal held the appellant entitled to avail Cenvat Credit, setting aside the impugned order and allowing the appeal. The judgment clarifies the distinction in applicability of the proviso to Rule 4(7) of CCR, 2004 between manufacturers/providers and ISDs, providing relief to the appellant based on statutory interpretation and lack of explicit restriction on ISDs.