2015 (1) TMI 124 - AT - Central Excise

Denial of refund claim - Bar of limitation - Declaration for availing cevant credit on capital goods was not filed timely - Held that - In this case it is not disputed the appellant has not filed a declaration. The only reason for denial of credit is that the declaration filed is late and no application for condonation of delay has been filed. By Circular No. 441/7/1999-CX, dated 23-2-1999 it has been clarified by the Board that credit cannot be denied on account of merely procedural lapse. In this case, it is not in dispute that the appellant has not filed proper declaration to avail Cenvat credit and duty has not been paid. In these circumstances, although there is a procedural lapse in non-filing of reasons for causing the delay in filing the declaration, that does not amount to that they are not entitled to take credit. In these circumstances, the appellant is entitled to take credit on these capital goods. Consequently, the reversal of the credit was not required. If at all amount has been reversed, in that case the appellant is entitled to refund claim. - Decided in favour of assesse.

Summary

Issues:
Appeal against denial of refund claim due to late filing of declaration for Cenvat credit on capital goods.

Analysis:
The appellant procured capital goods between 2-5-1995 to 4-5-1995 and filed a declaration under Rule 57T(1) of erstwhile Rules on 10-11-1995 to avail credit on the same date. The declaration was filed after six months, leading to the reversal of credit on the capital goods. Subsequently, it was realized that the credit reversal was not required, prompting a refund claim. Lower authorities rejected the refund claim citing the absence of an application for condonation of delay in filing the declaration. The matter was taken to the Tribunal, which remanded it back to the Adjudicating Authority to consider the issue in light of relevant precedents and circulars. Upon further review, the Tribunal found that the appellant had indeed filed a declaration, albeit late, and that the delay did not warrant denial of Cenvat credit. The Tribunal noted that the procedural lapse in filing the declaration did not invalidate the appellant's entitlement to credit on the capital goods, leading to the allowance of the appeal and the direction for the Adjudicating Authority to implement the order within 30 days.

The appellant's counsel argued that as per Board Circular No. 181/15/1996-CX and Circular No. 441/7/1999-CX, the requirement to file a declaration and explain the delay had been waived in certain circumstances. The counsel contended that since the appellant had filed the declaration and the delay was procedural, the denial of Cenvat credit was unwarranted. The Circular No. 441/7/1999-CX clarified that credit should not be denied solely due to procedural lapses. The appellant's compliance with the filing of the declaration, despite the delay, was emphasized as a crucial factor in supporting the claim for Cenvat credit on the capital goods. The argument highlighted the importance of distinguishing between substantive requirements and procedural delays in such cases, ultimately leading to the setting aside of the impugned order and the allowance of the appeal with consequential relief.

In conclusion, the Tribunal's decision hinged on the distinction between substantive compliance with the declaration requirement and procedural delays in filing the same. The presence of a procedural lapse in filing the declaration did not negate the appellant's entitlement to Cenvat credit on the capital goods. The Tribunal's interpretation of the relevant circulars and precedents supported the appellant's position, leading to the reversal of the impugned order and the allowance of the appeal with directions for the refund claim implementation by the Adjudicating Authority within a specified timeframe.