2024 (8) TMI 1204 - AT - Central Excise

CENVAT Credit - invoices issued before the introduction of time limit for credit availment - HELD THAT - Admittedly for two invoices issued on 28.06.2014 and 01.07.2014 credit of ₹13,59,600/- each was taken by the Appellant, as revealed from the show-cause notice. These invoices would go to show that by the time N/N. 21/2014-CE (NT) was brought into force on 01.09.2014, the said period of six months was not over but because of the fact that during those period no specific time limit was prescribed to avail the credit, denial of the same credit for the invoice issued prior to the effective date would naturally be in violation of the statutory provision contained in Section 38A of the Central Excise Act, 1944. To bring more clarity to the issue the same can be explained by placing an example that instead of invoice being issued on 01.07.2014, had it been issued on 07.01.2014, period of six months would have expired by the time N/N. 21/2014-CE (NT) was brought into force on 01.09.2014. It is apparently for this reason that consistent decision is passed by this Tribunal that the same N/N. 21/2014-CE (NT) is applicable to the invoices issued post N/N. 21/2014-CE (NT) - the Appellant having availed credit on these two invoices on 31.01.2015, since within six months of 01.09.2014, is entitled to the credits availed by it. The order passed by the Commissioner of CGST Central Excise (Appeals), Nashik is hereby set aside - Appeal allowed.

Summary

Issues:
Denial of CENVAT Credit for invoices issued before the introduction of time limit for credit availment.

Analysis:
The case involved the denial of CENVAT Credit to the appellant for invoices issued before the introduction of a time limit for credit availment. The appellant, a manufacturer of "Parachute Advanced" brand hair oil, had availed CENVAT Credit for two invoices issued in June/July 2014. The dispute arose when the Department objected to the appellant seeking credit in January 2015 for these invoices, citing Notification No. 21/2014-CE (NT) which imposed a six-month time limit for credit availment from the date of the invoice. The appellant's unsuccessful appeal before the Commissioner (Appeals) led to the matter being brought before the forum for adjudication.

During the appeal hearing, the appellant's counsel argued that the notification should not apply to invoices issued before its implementation date as per Section 38A of the Central Excise Act. The counsel relied on precedent decisions to support this argument and urged the order of the Commissioner (Appeals) to be set aside. In response, the Authorized Representative for the Respondent-Department supported the Commissioner's order, stating that the appellant had sufficient time to avail the credits within the stipulated period.

Upon reviewing the case record and precedent decisions, it was noted that the invoices in question were issued before the introduction of the time limit for credit availment. As no specific time limit existed during the issuance of these invoices, denying credit for invoices issued prior to the effective date of the notification would contravene the statutory provisions. The Tribunal emphasized that the notification should apply to invoices issued post its implementation date and held that the appellant, who availed credit within six months of the notification, was entitled to the credits. The appeal was allowed, setting aside the Commissioner's order with consequential relief for any unavailed credit.

In conclusion, the Tribunal's decision clarified that the time limit for credit availment should not be retroactively applied to invoices issued before the notification's implementation date, ensuring the appellant's entitlement to the credits availed within the specified period.