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2014 (11) TMI 32 - AT - Central ExciseCENVAT Credit - Limitation period for taking credit - whether the time limit of taking the credit would be applicable in respect of the triplicate copy of bill of entry specified in clause (c) of sub-rule (3) of Rule 57G - Held that - time limit of six months would be applicable from the date of issue of the bill of entry and even in respect of the goods imported prior to the amendment of Rule 57G(5) introducing the time limit. Rule 57G(3) very specifically provides that no credit under sub-rule (3) shall be taken by the manufacturer unless the inputs are received in the factory under the cover of specified documents. Further, sub-rule (5) specifically provides that credit shall not be taken by the manufacturer after six months of the date of issue of any document specified in sub-rule (3). The said sub-rule is very clear and prohibits the manufacturer to take credit after six months from the date of issue of the specified document. In the present case, there is no dispute that the credit has been taken after six months from the date of issue of the specified document and even the goods have been received in the factory on 21.03.1996, which is again more than six months as specified in the said sub-rule - Following decision of MRP Ltd. vs. CCE, Mangalore 2006 (11) TMI 231 - CESTAT, BANGALORE - while confirming the demand, penalty waived - Decided partly in favour of assessee.
Issues:
Import of gear box, credit availed under RG23A Part II, violation of rule 57G(5) of Central Excise Rules, demand confirmation, penalty imposition, applicability of time limit for credit, interpretation of Rule 57G(3) and 57G(5), Supreme Court ruling on time limit imposition, Tribunal's ruling on time limit applicability to bill of entry, relevance of judgment in Banner Pharma Caps Pvt. Ltd. case, Tribunal's decision in CCE vs. Ford India Ltd. case. Analysis: The case involves the import of gear box by the appellants and availing credit under RG23A Part II, leading to a show cause notice for violating rule 57G(5) of the Central Excise Rules, 1944. The demand for credit taken and penalty imposition were confirmed after rounds of litigation, including a remand by CESTAT. The key dispute revolves around the time limit for taking credit, as per Rule 57G(5), and its applicability to goods imported before the introduction of the time limit. The Tribunal referred to the Supreme Court's ruling in Osram Surya (P) Ltd. vs. CCE, Indore, emphasizing that the time limit imposition did not take away vested rights but only restricted the time for enforcing those rights. Additionally, the Tribunal's Larger Bench decision in MRP Ltd. vs. CCE, Mangalore clarified that the time limit of six months applies even to goods imported before the amendment introducing the time limit. The judgment in Banner Pharma Caps Pvt. Ltd. case was cited, highlighting the importance of endorsing bills of entry within the time limit. However, in the current case, the bills of entry were not endorsed within the stipulated period, leading to a clear violation of the time limit for availing credit. Furthermore, the Tribunal's decision in CCE vs. Ford India Ltd. case was referenced, emphasizing the objective of the time limit to prevent credit availing for inputs cleared by the manufacturer more than six months ago. The Tribunal upheld the demand due to the credit being taken beyond the specified time limit but set aside the penalty considering the goods were imported before the time limit introduction under Rule 57G. In conclusion, the appeal was dismissed based on the violation of the time limit for credit availing, as per Rule 57G(5), while the penalty was waived due to the goods being imported before the time limit imposition. The judgment provides a comprehensive analysis of the legal provisions and precedents to resolve the issues surrounding the credit availing and time limit applicability in the case.
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