9911796707
TMI Blog2024 (8) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... alance amount of credit may be taken in any subsequent financial year. In terms of Rule 4(2)(a) of these Rules, in respect of capital goods received at any point of time in a given financial year, the CENVAT credit shall be taken only for an amount not exceeding 50% of duty paid on such capital goods in the same financial year - there are no provision under the CENVAT Credit Rules, 2004 which debars a manufacturer from taking the credit if by some reason they fail to avail the credit immediately on receipt of the capital goods. Since the Respondent has availed the credit belatedly, they have utilised this credit for payment of duty after September 2011. Thus, they got less refund for the period after September 2011. Thus, there is no violation of condition 2B of the Notification No. 20/2007-C.E. dated 25.04.2007. Accordingly, there is no merit in the allegation of the Revenue that the Respondent has received excess refund during the period prior to September 2011. The alleged inadmissible credit taken in September 2011 has been proposed to be recovered under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 - the alleged credits taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; ii. Credit in respect of inputs amounting to Rs.49,19,209/-. 2.2. The Revenue disputed the belated availment of CENVAT Credit amounting to Rs. 64,52,554/- and contended that the credit was available to the Respondent for the period from April 2009 to September, 2011; this credit should have been availed and utilized by the last day of the respective months as per the conditions stipulated in the said Notification. In view of the delayed availment of CENVAT Credit, the Revenue was of the view that the Respondent had paid more duty from PLA instead of utilizing the whole CENVAT Credit available to them in the respective months. Thus, the Revenue alleged that the respondent got more refund in cash during the said period. It was also alleged that the Respondent has not fulfilled the conditions mentioned in the C.B.E.C. Circular F. No. 101/04/2008-CX.3 dated 04.06.2009. Accordingly, a Show Cause Notice dated 15.10.2012 was issued to the Respondent proposing reversal of CENVAT Credit amounting to Rs.64,52,554/- along with interest and penalty. 2.3. Upon adjudication, the ld. adjudicating authority vide the impugned order dropped the demand raised in the Notice stating that the input cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. Further, Board's Circular under F.No. 101/04/2008-CX.3 dated 04.06.2009 describes that condition of first utilizing the whole amount of credit before payment in cash as a substantive condition for availing the benefit of the said notification. Thus, there was no question of revenue neutrality at all when the said notification prescribed pattern, manner and sequence of discharge of duty liability which was not fulfilled by the Respondent. v. Further, the intention of the said notification to refund the amount that was discharged through the PLA (in cash) is for development of the area/region covered by the said notification. However, CENVAT credit taken on capital goods or inputs was not at all intended to be refunded by the said notification. In the present case it is observed that the Respondent by availing credit belatedly in contravention of the condition prescribed in the said notification paid more in PLA, which seems to enable them to get more refund than they were actually entitled to as per the said notification. Again, as per Board's Circular under F.No. 101/04/2008-CX.3 dated 04.06.2009 such excess amount of refund to the extent CENVAT credit was not taken, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and when they came to know that such credit was admissible, they took credit of the entire amount in the month of September 2011. 6.1. We observe that in this case there is no dispute regarding the eligibility of the credit availed by the Respondent. We find that Rule 4(2)(a) of the CENVAT Credit Rules, 2004 prescribes the availability of CENVAT Credit on capital goods and it stipulates that CENVAT Credit in respect of capital goods shall be taken only for an amount not exceeding 50% of duty; as per Rule 4(2)(b) of these Rules, the balance amount of credit may be taken in any subsequent financial year. In terms of Rule 4(2)(a) of these Rules, in respect of capital goods received at any point of time in a given financial year, the CENVAT credit shall be taken only for an amount not exceeding 50% of duty paid on such capital goods in the same financial year. We are of the view that this sub-rule restricts the availability of CENVAT credit on capital goods to a maximum of 50% of duty paid on the said capital goods and this sub-rule does not make it mandatory that a manufacturer must avail the credit of 50% duty on the capital goods immediately on receipt of the capital goods. We do ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
