2018 (12) TMI 856 - AT - Central Excise

CENVAT Credit of the inputs lying in their stock - SSI benefit availed - credit availed after crossing of threshold limit of SSI Exemption - applicability of Rule 3 (2) of Cenvat Credit Rules 2004 and Rule 4 (1) of CCR 2004 - Held that - Both these Rules cannot be applied simultaneously - Rule 3 (2) prescribes the eligibility to avail cenvat credit as soon as the unit crosses threshold limit and rule 4 (1) prescribes particular condition for the availment of that credit. If a condition under rule 4 specifically disallows cenvat credit on a particular goods or service the cenvat credit cannot be allowed under rule 3 of the Cenvat Credit Rules 2004. Though the appellant has taken a plea that Rule 3 (2) of CCR 2004 has been provided with the sole intention of law that the goods which have become dutiable after the exemption seized to exist then naturally to avoid cascading effect of duty suffered on inputs involved on such goods such benefit of cenvat credit is to be given to the manufacturer and any provision of law putting a limitation thereto shall not be applicable simultaneously to this provision. The appellate authority has rightly denied the availment of cenvat credit to the appellant for such of its stock. The invoices were beyond a period of six months of appellant crossing the threshold limit of SSI exemption - appeal dismissed - decided against appellant.

Summary

Issues:
1. Disallowance of cenvat credit under Rule 4 (1) of CCR, 2004.
2. Interpretation of Rule 3 (2) and Rule 4 (1) of Cenvat Credit Rules, 2004.

Analysis:
1. The appellant, engaged in manufacturing marble slabs, crossed the threshold limit for SSI exemption and claimed cenvat credit on inputs under Rule 3 (2) of Cenvat Credit Rules, 2004. The Department disallowed the credit based on Rule 4 (1) of CCR, 2004, demanding recovery and imposing penalties. The appellant contested this disallowance, arguing that Rule 3 (2) permits credit upon crossing the threshold, while Rule 4 (1) sets conditions for credit availment. The Department contended that credit cannot be taken beyond six months of specified document issuance. The Tribunal analyzed both rules and relevant case laws to determine the applicability of these rules simultaneously.

2. The Tribunal examined Rule 3 (1) and Rule 4 (1) of CCR, 2004 to ascertain if they can be applied concurrently. Rule 3 (1) allows credit on inputs when goods cease to be exempted, while Rule 4 (1) specifies conditions for credit availment, including a six-month limit from document issuance. The appellant argued that Rule 3 (2) should prevail over Rule 4 (1) post-exemption threshold crossing. However, the Tribunal held that both rules can coexist, with Rule 4 (1) imposing specific conditions on credit availment. The Tribunal emphasized the need to interpret tax statutes based on clear language and legislative intent, citing relevant legal principles and precedents.

3. Relying on established legal principles, the Tribunal concluded that the appellant's case differed from cited precedents. The Tribunal upheld the denial of cenvat credit due to invoices being beyond six months from the SSI exemption threshold crossing. The Tribunal emphasized the importance of interpreting statutes based on clear wording and legislative intent. Consequently, the Tribunal dismissed the appeal and affirmed the appellate authority's decision to deny the cenvat credit, based on the specific conditions outlined in Rule 4 (1) of CCR, 2004.

This detailed analysis of the issues involved in the legal judgment provides a comprehensive understanding of the Tribunal's decision regarding the disallowance of cenvat credit and the interpretation of relevant rules in the Cenvat Credit Rules, 2004.