2013 (3) TMI 282 - AT - Central Excise

Rectification of mistake perceived in 2012 (8) TMI 596 - CESTAT, NEW DELHI - as per department the applicants had taken credit based on invoices dated earlier to 10-9-2004 - Held that - The present applicant is a manufacturer of excisable goods. Till 10-9-2004 credit of service tax on input services used in manufacture of excisable products was not available. Such credit was extended for the first time by Cenvat Credit Rules, 2004. When such credit was extended a restriction was put that such credit would be extended only in respect of service tax paid on invoices raised on or after 10-9-2004. Dispute relating such circumstances was not before the Division Bench in the case of Idea Mobile Communications Ltd 2011 (11) TMI 423 - CESTAT, NEW DELHI as relied by assessee so not to accept the argument of the applicant that the issue decided by final order dated 11-11-2011 2012 (8) TMI 596 - CESTAT, NEW DELHI was capable of two interpretations. The provision in Rule 9(1)(f) is plain and simple and the credit taken by the applicant was in contravention of the provision without disclosing the fact that the credit was taken against invoices dated earlier than 10-9-2004. So there is no error in the finding in order dated 11-11-2011 in the matter of invoking extended period of time and hence no mistake to be rectified in the order - the present application is basically one for re-appreciation of facts - reject the application for rectification of mistake.

Summary

Issues:
Rectification of mistake in the Final Order regarding Cenvat credit taken for service tax on insurance premiums paid for plant and machinery before 10-9-2004. Dispute on the maintainability of demand, time-barred issue, and suppression of facts.

Analysis:
The Final Order in question dealt with the rectification of a perceived mistake in Final Order No. 836/2011-SM(BR) regarding the Cenvat credit taken by the applicants for service tax on insurance premiums for plant and machinery before 10-9-2004. The dispute arose as Rule 9(1)(f) of Cenvat Credit Rules, 2004 allowed credit only for invoices issued on or after 10-9-2004. The Revenue initiated proceedings to recover the credit taken before the specified date, leading to a Show Cause Notice dated 22-5-2006. The Tribunal initially held that the demand was maintainable on merits and rejected the argument of time-barred demand due to the notice being issued after a significant delay.

The application for rectification was based on a subsequent decision by a Division Bench of the Tribunal, which held that credit based on invoices before 10-9-2004 was permissible under the Cenvat Credit Rules, 2004. The applicant argued that since this decision postdated the original order, it should be considered in the rectification process. The main contention was that different benches had conflicting views on the issue, implying no intent to evade tax, and therefore, the demand invoking the extended period should be set aside.

The Tribunal, after considering arguments from both sides, concluded that the decision cited by the applicant did not address the same issue as in the present case. The Tribunal clarified that the restriction on credit before 10-9-2004 for service tax on input services used in manufacturing excisable goods was clear under Rule 9(1)(f). The Tribunal found no error in the original order and rejected the application for rectification. It was emphasized that the application essentially sought a re-evaluation of facts related to suppression, which was beyond the scope of rectification of mistakes.

In summary, the Tribunal upheld the original decision, emphasizing the clear provision in Rule 9(1)(f) regarding the timeline for claiming Cenvat credit and rejecting the application for rectification based on the argument of conflicting views from different benches and the nature of the requested rectification exceeding the scope of rectifiable mistakes.