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CX - Notif. 21/2014-CX(NT) prohibiting manufacturer from taking CENVAT credit after six months from date of issue of invoice does not apply to invoices issued prior to date of notification: CESTAT

 

By TIOL News Service

MUMBAI, MAR 27, 2018: THE appellant availed CENVAT credit during the period 01.11.2014 to 05.11.2014 on the invoices that were issued during the months of March and April 2014.

The case of the department is that as per Notification no. 21/2014-CE(NT) dt. 11.07.2014, six months period from the date of issue of invoices is prescribed for taking credit.

And, therefore, the credit taken,as mentioned above, was disallowed.

The appellant is before the CESTAT and submits that the six months period was enhanced to one year vide notification 6/2015-CE(NT) dt. 01.03.2015. Consequently, the credit taken during the entire period from 01.03.2014 to 28.02.2015 is admissible. It is further submitted that the six months period provided under rule 4 of CCR, 2004 is only procedural requirement and which cannot curtain the substantive right of CENVAT credit.The appellant also emphasized that even if the six months embargo is to be given effect to it would be only in respect of the invoice issued on or after 11.07.2014 as the notification cannot be given the retrospective effect.

The AR reiterated the findings of the lower authorities.

After considering the submissions, the Bench observed thus –

+ On going through the notification no. 6/2015-CE(NT) dt. 01.03.2015, the period available for taking credit is 1 year in terms of the notification, the invoices issued in the month of March and April 2014 become eligible for cenvat credit.

+ I also observe that the notification no. 21/2014-CE(NT) dt. 11.07.2014 should be applicable to those cases wherein the invoices were issued on or after 11.07.2014 for the reason that notification was not applicable to the invoices issued prior to the date of notification, therefore, at the time of issuance of the invoices no time limit was prescribed. Therefore in respect of those invoices the limitation of six months cannot be made applicable.

+ Even though the credit was not entered in so called RG23A Part-II but is recorded in the books of accounts, it will be considered as cenvat credit was recorded. On this ground also it can be said that there is no delay in taking the credit.

Holding that the appellant had correctly availed CENVAT credit, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-985-CESTAT-MUM)


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: Time limit to take cenvat credit

the subject time restriction to take credit is imposed w.e.f 1.9.2014 vide Notfn No. 21/2014-NT dated 11.07.2017 which is prospective in nature as it is applicable in respect of credits taken on or after 1.9.2014. Judgement says that time restriction is applicable only for the invoices issued on or after 11.7.2014 and credit can be taken on the invoices issued prior to 11.7.2014 can be taken without any time limit may not be the intention of the provision. In fact it appears that time gap given from the date of notification (11.7.2014) to effective date (1.9.2014) is to provide opportunity to the trade to avail credit on any missed invoices. Further, not having such condition at the time of issue of invoices is no way deprive of any action on the part of the credit taker. Another reason given for allowing credit is that it is suffice if the credit is taken in the books of records even though the same is not reflected in the Cenvat Credit Register. Unless it is shown in the Cenvat Credit Register and also declared in the periodical returns how it was considered as shown in the books of records. If such an analogy is drawn how to recon the relevant date to issue SCN based on the date of receipt of input/input service shown in any book of record or on the date of taking credit in Cenvat Credit Register/ month of credit shown in the periodical returns.

Posted by mallikarjun reddy c
 

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