2018 (3) TMI 263 - AT - Central Excise

CENVAT credit - demand on the ground that the appellants were required to file a statement of utilization of credit, payment of duty and taking of credit by 15th day of subsequent month, which were not filed - N/N. 01/2010-CE dated 6.2.2010 - Held that - As per the said Notification, Condition 5 (d) stipulates that the appellant is required to file a statement of the total duty payable as well as the duty paid by utilization of Cenvat credit or otherwise and the credit taken on or before 15th of the subsequent month - Admittedly, the appellant did not comply with the condition of the notification. Hon ble Apex Court in the case of Mangalore Chemicals & Fertilizers Ltd. 1991 (8) TMI 83 - SUPREME COURT OF INDIA has held that Condition 5(d) of Notification No.01/2010-CE dated 6.2.2010 is similar to other notifications which are in the manner of procedure to be followed by the appellant wherein the appellant is required to file certain documents before a particular date. If such documents are filed with a delay, in that circumstance, it is only a procedural lapse on the part of the appellant, the benefit of notification cannot be to the appellant. Condition 5 (d) of N/N. 01/2010-CE dated 6.2.2010 is procedural in nature and for complying with the said condition with a delay cannot be fatal to the appellant - the self credit taken by the appellant cannot be denied. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Non-compliance with the condition of filing a statement by the 15th day of the subsequent month under Notification No.01/2010-CE.
2. Denial of self-credit due to procedural lapses.
3. Determination of whether the conditions are substantive or procedural.

Issue-wise Detailed Analysis:

1. Non-compliance with the condition of filing a statement by the 15th day of the subsequent month under Notification No.01/2010-CE:
The appellants failed to file the required statement of utilization of credit and payment of duty by the 15th day of the subsequent month for the period from April 2015 to June 2015, as mandated by Notification No.01/2010-CE dated 6.2.2010. The delay ranged from 9 to 10 days. As a result, show cause notices were issued to deny the self-credit taken by the appellants. The adjudicating authority initially sanctioned the self-credit, but the Commissioner (Appeals) later disallowed it due to the failure to meet the filing deadline.

2. Denial of self-credit due to procedural lapses:
The appellants argued that the denial of self-credit was based solely on the procedural lapse of late filing, which should not negate the substantive benefit of the notification. They cited precedents where similar conditions in other notifications (No.32/99-CE and No.33/99-CE) were deemed procedural. The Tribunal in the cases of Vinay Cement Ltd. and K.K. Beverages Pvt. Ltd. held that procedural lapses should not result in the denial of substantive benefits. The appellants also referenced the Supreme Court's decision in Mangalore Chemicals & Fertilizers Ltd., which distinguished between substantive and procedural conditions, asserting that procedural lapses should not lead to denial of benefits.

3. Determination of whether the conditions are substantive or procedural:
The Tribunal examined Notification No.01/2010-CE and compared it with Notifications No.32/99-CE and No.33/99-CE, which had similar procedural requirements. The Tribunal observed that the condition to file a statement by a specific date is procedural. The Tribunal cited previous decisions, including those of the Supreme Court and the CESTAT, which consistently held that procedural delays should not result in the denial of substantive benefits. The Tribunal also noted that the Ministry had not admitted similar objections in other cases, reinforcing the view that procedural delays are not grounds for denying benefits.

Conclusion:
The Tribunal concluded that condition 5(d) of Notification No.01/2010-CE is procedural in nature. The delay in filing the required statement does not justify the denial of self-credit. The Tribunal set aside the impugned orders and allowed the appeals with consequential relief.

Final Judgment:
The appeals were allowed, and the denial of self-credit was overturned, providing consequential relief to the appellants. The Tribunal emphasized that procedural lapses should not negate the substantive benefits of the notification.