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2022 (6) TMI 858 - AT - Central ExciseCENVAT Credit - denial of Cenvat Credit on the ground that the appellant have taken the Cenvat Credit suo-moto as they have also filed the refund claim - time limitation - HELD THAT - The Cenvat Credit was denied by both the lower Authorities on the ground that they have taken credit suo-moto. It is difficult to understand what is the meaning of suo-moto where the appellant have taken the credit first time at the time the refund stand rejected. The appellant had two option either to pursue the refund or to take the credit which is permissible as per Cenvat Credit Rules, 2004. Since the appellant s claim stand rejected and on that submission their appeal also disposed of by this tribunal. According they have taken the Cenvat Credit after disposal of the appeal there is nothing survive in the department s case. Time Limitation - HELD THAT - The allegation of time limitation was not made in the show cause notice. Therefore, the appellant cannot be expected to make any presentation on the issue which was not raised in the show cause notice. Secondly, it is admitted fact that the appellant have taken the Cenvat Credit of ISD invoice and in case of ISD invoice no time limit has been prescribed. It is a settled law that if the invoice is of dated prior to amendment inserting the 1 year time limit, in such case the limitation on 1 year shall not apply, for this reason also the ground of the Lower Authority on limitation does not survive. Hence there is nothing wrong in availment of Cenvat Credit by the appellant. Appeal allowed - decided in favor of appellant.
Issues:
1. Refund claim jurisdiction and rejection on time bar grounds. 2. Denial of Cenvat Credit on input service. 3. Appeal against rejection of refund claim. 4. Allegation of taking Cenvat Credit suo-moto. 5. Grounds of limitation on Cenvat Credit. Analysis: 1. The case involved a dispute regarding the refund claim for input service through the Head Office, which was initially rejected on jurisdictional grounds and later on time bar. The appellant filed an appeal against the rejection, which was also dismissed by the Commissioner (Appeals) leading to the present appeal before the Tribunal. 2. The issue of denial of Cenvat Credit on the input service arose as the Adjudicating Authority disallowed the credit based on the appellant taking the credit suo-moto. The appellant argued that they rightfully took the credit based on ISD invoices issued by the head office and that the issue of refund was no longer relevant as their refund claim had been rejected. The Tribunal found in favor of the appellant, stating that they had the option to pursue the refund or take the credit, and since the refund claim was rejected, the appellant was within their rights to avail the Cenvat Credit. 3. The appellant's representative argued that the order in original and order in appeal went beyond the scope of the show cause notice as they raised issues of time limitation on the Cenvat Credit. The Tribunal agreed, noting that the allegation of limitation was not raised in the show cause notice, and therefore, the appellant could not be expected to address it. Additionally, since the ISD invoice was issued prior to the amendment introducing a 1-year time limit, the Tribunal held that the limitation did not apply in this case, further supporting the appellant's right to avail the Cenvat Credit. 4. The Revenue representative contended that the appellant had taken the credit suo-moto while pursuing the refund claim, making them ineligible for the credit during that period. However, the Tribunal found that the appellant had the right to choose between pursuing the refund and taking the credit, and since the refund claim was rejected, the appellant's decision to avail the credit was justified. 5. Ultimately, the Tribunal set aside the impugned order, allowing the appeal and ruling in favor of the appellant based on the grounds that the denial of Cenvat Credit was unfounded, given the rejection of the refund claim and the absence of any time limitation applicable to the ISD invoice.
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