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2023 (11) TMI 12 - AT - Central ExciseReversal of CENVAT Credit - manufacture of dutiable as well as exempted medicaments - eligibility of the cenvat credit should be considered as on the date of receipt of the service or on taking the credit in the books - HELD THAT - It is a settled law that the eligibility of the cenvat credit has to be considered as on the date of receipt of the services for the reason that the moment appellant received the service along with invoices on that date the cenvat credit stand accrued to the appellant. As per the excel sheet submitted by the appellant in respect of all the invoices related to the credit of Rs. 1, 58, 66, 384/- it is observed that all the invoices are pertaining to the period prior to 01.04.2011. As it is opined that the eligibility of the credit to be considered as on date of receipt of service but in the present case the Adjudicating Authority has not examined the actual date of receipt of service. Therefore for this limited purpose matter needs to be remanded back to the Adjudicating Authority. The Adjudicating Authority opinion that only for the reason that the credit was availed after 01.04.2011 when Rule 6(5) was omitted the appellant are not eligible for cenvat credit on 16 services as prescribed in the said Rule cannot be agreed. Even though the Rule 6 (5) was omitted from 01.04.2011 if it is proved that services were received prior to 01.04.2011 the credit taken after 01.04.2011 shall be admissible to the appellant. The appeal allowed by way of remand to the Adjudicating Authority.
Issues:
The case involves the following issues: 1. Whether the appellant correctly reversed the cenvat credit and is eligible for re-credit. 2. Allegation of failure to follow prescribed conditions of Rule 6(3A) for credit reversal. 3. Demand for inclusion of certain credit amounts and imposition of penalty. Issue 1 - Correct Reversal of Cenvat Credit: The appellant, engaged in manufacturing medicaments, reversed cenvat credit on a provisional basis at the end of the financial year 2011-12. Upon final determination, they found an excess reversal and claimed re-credit. However, a show cause notice was issued alleging failure to follow Rule 6(3A) conditions. The adjudicating authority confirmed a demand for short paid/reversed credit due to non-inclusion of specific amounts, upheld by the learned Commissioner who also imposed interest and penalty. The appellant appealed against this decision. Issue 2 - Alleged Failure to Follow Rule 6(3A) Conditions: The show cause notice alleged that the appellant failed to include certain credit amounts pertaining to services covered by Rule 6(5) in the year 2011-2012. The adjudicating authority confirmed the demand for inclusion of a specific credit amount, leading to a short paid/reversed credit. The learned Commissioner upheld this decision, requiring the appellant to pay the demanded amount along with interest and penalty under Rule 15 of the Cenvat Credit Rules, 2004. Issue 3 - Demand for Inclusion of Credit Amounts and Penalty Imposition: The appellant argued that all services for which credit was availed were received prior to the omission of Rule 6(5) and therefore should be eligible for credit. Citing various judgments, the appellant contended that eligibility of cenvat credit should be based on the date of service receipt. The Tribunal observed that the Adjudicating Authority did not examine the actual date of service receipt and remanded the matter back for further consideration. The Tribunal disagreed with the Authority's reasoning that credit availed after the omission of Rule 6(5) was not admissible, emphasizing that if services were received before the omission, credit should be allowed. In conclusion, the Tribunal set aside the impugned order and remanded the case to the Adjudicating Authority for further examination based on the date of service receipt, allowing the appeal in this regard.
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