CX - Date of invocation should be considered as deemed date of invoice in respect of all previous documents/invoices available with manufacturing and supplying agency to avail such cenvat credit: CESTAT
By TIOL News Service
MUMBAI, AUG 28, 2018: NOTIFICATION 21/2014-CX(NT) dated July 11, 2014 made the following amendment in rule 4 of the CCR, 2004 -
3. In the said rules, in rule 4, -
(a) in sub-rule (1), after the second proviso, the following proviso shall be inserted with effect from first day of September 2014, namely :-
"Provided also that the manufacturer or the provider of output service shall not take CENVAT credit after six months of the date of issue of any of the documents specified in sub- rule (1) of rule 9.";
The appellant had availed cenvat credit of Rs.16,84,841/- on 30.09.2014 against five invoices pertaining to the period between 05.09.2010 and 22.08.2013.
On scrutiny of ER returns for the month of September 2014, the assessing officer pointed out the irregularity and issued show-cause accordingly.
The demand notice was confirmed along with interest and penalty of 10% and the same was upheld by the lower appellate authority.
Before the CESTAT, the appellant assessee cited the decision in Voss Exotech Automotive Pvt. Ltd. - 2018-TIOL-985-CESTAT-MUM where it is held that the notification prohibiting a manufacturer from taking CENVAT credit after six months from the date of issue of invoice does not apply to invoices issued prior to date of notification.
The AR submitted that the amended proviso was brought into Rule on 11.07.2014 and the effective date for application of this proviso stipulating 6 months period was 01.09.2014; that a breathing period of one month and two weeks was given in respect of adjustment of utilisation of previous documents like invoice for availment of cenvat credit which the appellant did not prefer to use and, therefore, no further benefit can be extended to him that would be violative of statutory restriction.
The Bench considered the submissions and observed -
+ The insertion of the proviso is limited to its application and no explanation even by way of clarificatory orders by the department is found in respect of application of the Rule to the invoices raised prior to the amendment date or about adjustment of such credit in so called breathing period of nearly one month and three weeks during which period, situation might not have arisen to avail such credit since production is influenced by lot of factors including rainy season, labour problem etc.
+ The clarificatory order issued by the CBEC Board vide Circular no. 990/14/2014-CX-8 dated 19.11.2014 which has been referred in the show-cause notice is unrelated to the issue in hand since it has exempted the period of limitation in three contingencies if within six months credit was taken for the first time and subsequently reversed.
+ Therefore, in conformity to the judicial precedent set by this Tribunal in 2018 decision referred supra, the only inference that can be drawn is that such Notification is applicable to the invoices/ documents raised after 11.07.2014.
+ The other presumption could be that date of invocation should be considered as deemed date of invoice in respect of all previous documents/invoices available with the manufacturing and supplying agency to avail such cenvat credit, that too in the earliest possible opportunity, within six months restriction to be counted from 11.07.2014. In the case in hand, since appellant had availed the credits on 30.09.2014 in the same month on which the appended proviso to the Rule came into force, it is entitled to avail and adjust the same against the final product of his manufacturing unit.
The appeal was allowed.
(See 2018-TIOL-2635-CESTAT-MUM)
